Multiple Stakeholders in Road Pricing: A Game Theoretic Approach

Anthony E. Ohazulike (), Georg Still (), Walter Kern () and Eric C. Berkum ()
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Anthony E. Ohazulike: University of Twente
Georg Still: University of Twente
Walter Kern: University of Twente
Eric C. Berkum: University of Twente

A chapter in Game Theoretic Analysis of Congestion, Safety and Security, 2015, pp 159-189 from Springer

Abstract: 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.

Keywords: Road pricing game; Nash equilibrium; Multi-level optimization; Multi-objective optimization; Equilibrium problem with equilibrium conditions; Mechanism design (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:spr:ssrchp:978-3-319-11674-7_7

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DOI: 10.1007/978-3-319-11674-7_7

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