Determining Fair Ticket Prices in Public Transport by Solving a Cost Allocation Problem

Ralf Borndörfer () and Nam-Dũng Hoàng ()
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Ralf Borndörfer: Zuse Institute Berlin (ZIB)
Nam-Dũng Hoàng: Zuse Institute Berlin (ZIB)

A chapter in Modeling, Simulation and Optimization of Complex Processes, 2012, pp 53-63 from Springer

Abstract: Abstract Ticket pricing in public transport usually takes a welfare maximization point of view. Such an approach, however, does not consider fairness in the sense that users of a shared infrastructure should pay for the costs that they generate. We propose an ansatz to determine fair ticket prices that combines concepts from cooperative game theory and integer programming. An application to pricing railway tickets for the intercity network of the Netherlands is presented. The results demonstrate that prices that are much fairer than standard ones can be computed in this way.

Keywords: Public Transport; Allocation Method; Grand Coalition; Cost Allocation; Cooperative Game Theory (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-642-25707-0_5

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DOI: 10.1007/978-3-642-25707-0_5

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