The generalized Nash equilibrium model for oligopolistic transit market with elastic demand

Jing Zhou, William H.K. Lam and Benjamin G. Heydecker

Transportation Research Part B: Methodological, 2005, vol. 39, issue 6, 519-544

Abstract: This paper presents a bilevel transit fare equilibrium model for a deregulated transit system. In the upper-level problem, the transit competition is portrayed as an n-player, non-cooperative game by changing the fare structure of each of a set of transit lines separately so as to maximize the profit of each transit operator within the oligopolistic market. We show that there exists a generalized Nash game between transit operators, which can be formulated as a quasi-variational inequality problem. In the lower-level problem, the passengers' response to the equilibrium fare structure of the transit operators is represented by the stochastic user equilibrium transit assignment model with elastic OD demand. As a result, the bilevel transit fare equilibrium problem is presented in the Stackelberg form and solved by a heuristic solution algorithm based on a sensitivity analysis approach. A numerical example is given to illustrate the competition mechanism on the transit network and some useful findings are presented on competitive operations.

Date: 2005
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Citations: View citations in EconPapers (37)

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