Exploiting modularity for co-modal passenger-freight transportation

Using a game theoretic approach, this paper explores a futuristic passenger-freight co-modality system that leverages autonomous modular vehicle (AMV) technology. In our model, a transit operator and a freight carrier operate within a stylized city, transporting passengers and parcels, respectively. The freight carrier can rent the transit operator’s underutilized transport capacity during off-peak periods through a market mechanism. By analyzing the design problems of both the operator and the carrier, we characterize their willingness-to-trade function, which defines the feasible region for a two-player game. We formulate four distinct market mechanisms, each corresponding to a different type of game. The first two are leader–follower Stackelberg games, differing in which player assumes the leadership role. The third mechanism features iterative negotiation between both players until equilibrium is achieved, while the fourth assumes full cooperation. Our results indicate that in the Stackelberg games, the leader captures all the benefits of co-modality, whereas neither player benefits in the negotiation game. Moreover, the carrier-led Stackelberg game proves more efficient than the operator-led one. Finally, while regulatory interventions such as price caps can promote a more equitable benefit distribution in the Stackelberg framework, similar outcomes are attainable without intervention in the cooperative game.