A Bilevel Model of Taxation and Its Application to Optimal Highway Pricing

Martine Labbé, Patrice Marcotte and Gilles Savard
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Martine Labbé: Institut de Statistique et Recherche Opérationnelle, Université Libre de Bruxelles, Boulevard du Triomphe, CP 210/01, B-1050 Bruxelles, Belgique
Patrice Marcotte: Centre de recherche sur les Transports and Département d'Informatique et Recherche Opérationnelle, Université de Montréal, CP 6128, Succursale Centre-Ville, Montréal, Québec, Canada H3C 3J7
Gilles Savard: GERAD and Département de mathématiques et génie industriel, Ecole Polytechnique de Montréal, CP 6079, Succursale Centre-Ville, Montréal, Québec, Canada H3C 3A7

Management Science, 1998, vol. 44, issue 12-Part-1, 1608-1622

Abstract: We consider a bilevel model where the leader wants to maximize revenues from a taxation scheme, while the follower rationally reacts to those tax levels. We focus our attention on the special case of a toll-setting problem defined on a multicommodity transportation network. We show that the general problem is NP-complete, while particular instances are polynomially solvable. Numerical examples are given.

Keywords: Pricing; Networks; Bilevel (search for similar items in EconPapers)
Date: 1998
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Citations: View citations in EconPapers (85)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:44:y:1998:i:12-part-1:p:1608-1622

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