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Multiple Stakeholders in Road Pricing: A Game Theoretic Approach

In: Game Theoretic Analysis of Congestion, Safety and Security

Author

Listed:
  • Anthony E. Ohazulike

    (University of Twente
    University of Twente)

  • Georg Still

    (University of Twente)

  • Walter Kern

    (University of Twente)

  • Eric C. Berkum

    (University of Twente)

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.

Suggested Citation

  • Anthony E. Ohazulike & Georg Still & Walter Kern & Eric C. Berkum, 2015. "Multiple Stakeholders in Road Pricing: A Game Theoretic Approach," Springer Series in Reliability Engineering, in: Kjell Hausken & Jun Zhuang (ed.), Game Theoretic Analysis of Congestion, Safety and Security, edition 127, pages 159-189, Springer.
    • Handle: RePEc:spr:ssrchp:978-3-319-11674-7_7
    DOI: 10.1007/978-3-319-11674-7_7
    as

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