Multiple Stakeholders in Road Pricing: A Game Theoretic Approach

Anthony E. Ohazulike*, Georg Still, Walter Kern, Eric C. van Berkum

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingChapterAcademicpeer-review

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Abstract

We investigate a game theoretic approach as an alternative to the standard multi-objective optimization models for road pricing. Assuming that various, partly conflicting traffic externalities (congestion, air pollution, noise, safety, etcetera) are represented by corresponding players acting on a common network, we obtain a non-cooperative game where each player pursues a different road pricing strategy to control a specific externality. The game is actually a Stackelberg game, but now with multiple leaders/actors in the upper level determining link tolls, and road users as followers in the lower level, adapting their route choice to the tolls imposed. This chapter reviews our earlier results on the game theoretic models, and the existence of Nash Equilibrium (NE). In order to cope with the fact that NE may not exist in the game, we propose a “first-best taxation” scheme, allowing the government to enforce pre-described NE (analogous first-best pricing schemes). We further discuss the stability of this taxing mechanism.

Original languageEnglish
Title of host publicationGame Theoretic Analysis of Congestion, Safety and Security
Subtitle of host publicationTraffic and Transportation Theory
EditorsKjell Hausken, Jun Zhuang
Place of PublicationLondon
PublisherSpringer
Pages159–189
ISBN (Electronic)978-3-319-11674-7
ISBN (Print)978-3-319-11673-0
DOIs
Publication statusPublished - 2015

Publication series

NameSpringer Series in Reliability Engineering
PublisherSpringer
ISSN (Print)1614-7839
ISSN (Electronic)2196-999X

Keywords

  • Equilibrium problem with equilibrium conditions
  • Mechanism design
  • Multi-level optimization
  • Multi-objective optimization
  • Nash equilibrium
  • Road pricing game

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