The structure of public-private sector collaboration in travel information markets: A game theoretic analysis

In recent years there has been substantial growth in the prevalence of ad-hoc data exchange arrangements between local traffic authorities and commercial traffic information service providers. Although these arrangements are widely regarded as mutually beneficial, in fact to date, no comprehensive analysis exists of the operation of this information market, nor of its consequences for the different market participants involved. To address this gap, this paper presents a new framework which enables the analysis of the long-term outcomes of various collaboration schemes for traffic information service providers, local traffic authorities and network users. The framework is based on a bi-level non-cooperative Nash game in which the upper level represents the data exchange arrangements between local traffic authorities and commercial traffic information service providers and the lower level represents the impact of the provided information services on network users. The framework is flexible and can accommodate a variety of different market structures and commercial behaviours. The game theoretic model is formulated and solved as an equivalent equilibrium problem with equilibrium constraints. Numerical experiments are undertaken using this framework to explore the consequence of a number of commonly observed real-world data exchange arrangements. This analysis leads to three general conclusions. First, the results suggest that when a local traffic authority seeks only to minimise the total network travel time and offers free collaboration schemes, it should collaborate with all the cooperating service providers in the market. Second, if conversely, a local traffic authority seeks only to maximise its revenue from selling its data to service providers, it should be aware that its revenue does not always increase by selling the data to more service providers, since the willingness of service providers to pay for data declines as more providers are granted access. And finally, if a local traffic authority seeks to establish paid schemes that balance the benefit to network users and its own revenue benefits, then circumstances can easily arise in which these two objectives are in conflict with one another.