Multi-objective road pricing: Game Theoretic and Multistakeholder Approach

Anthony Ohazulike, Michiel C.J. Bliemer, Georg J. Still, Eric C. van Berkum

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Costs associated with traf﬿c externalities such as congestion, air pollution, noise, safety, etcetera are becoming “unbearable‿. The Braess paradox shows that combating congestion by adding infrastructure may not improve traf﬿c conditions, and geographical and/or ﬿nancial constraints may not allow infrastructure expansion. Road pricing presents an alternative to combat the mentioned externalities. The traditional way of road pricing, namely; congestion charging, may create negative bene﬿ts for the society and stakeholders, thus, defeating its main purpose (increasing transportation ef﬿ciency and social welfare). We study a road pricing that encompasses all the mentioned externalities. A meanwhile standard approach to deal with conflicting objectives (externalities) are models from Multi-objective Optimization. This approach assumes that there is one leader stakeholder/decision-maker. But then, if more than one stakeholder participates in the road pricing, the concept of Nash equilibrium (NE) from economics may constitute an alternative model. Using game theoretic approach, we study and extend the single authority road pricing scheme (Stackelberg game) to a pricing scheme with multiple authorities/regions (with likely contradicting objectives). Our model includes users interests in the upper level - giving a promising model that deals with user acceptability of road pricing. We investigate the existence of NE among actors and prove that no pure NE exists in general. Then again, NE may exist under special conditions. Since NE may not exist, and since competition may deteriorate the social welfare, we further design a mechanism that simultaneously induces a pure NE and cooperative behaviour among actors, thus, yielding optimal tolls for the system.
Original languageEnglish
Title of host publicationCompendium of Papers of the Transportation Research Board (TRB), 91st Annual Meeting, Washington DC, January 22-26, 2012.
Place of PublicationWashington
PublisherTransportation Research Board (TRB)
Number of pages21
ISBN (Print)not assigned
Publication statusPublished - Jan 2012
Event91st Transportation Research Board (TRB) Annual Meeting 2012 - Washington, United States
Duration: 22 Jan 201226 Jan 2012
Conference number: 91

Publication series

PublisherTransportation Research Board


Conference91st Transportation Research Board (TRB) Annual Meeting 2012
Country/TerritoryUnited States


  • MSC-00A69
  • EWI-21589
  • METIS-284375
  • IR-79689


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