Stackelberg strategy solution for optimal software release policies

We present a software release policy which is based on the Stackelberg strategy solution concept. The model formulated assumes the existence of two type of producers in the market, the leader and follower. The resulting release policy combines both cost factors and a loss of opportunity factor which is the result of competition between the rival producers. We define a Stackelberg strategy pair in the context of our model and, through a series of preliminary results, show that an optimal strategy pair exists. We also present a numerical example which utilizes a software reliability growth model based on the nonhomogeneous Poisson process. Finally, we explore the relative leadership property of the optimal strategies.This work was supported in part by a FOAS Research Grant provided by RMIT. The author would like to thank the referees for constructive suggestions which helped to improve a previous version of this paper.