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Network Pricing of Congestion-Free Networks: The Elastic and Linear Demand Case

Published: 01 August 2017 Publication History

Abstract

In this work, we address the problem of maximizing the revenue raised from tolls set on a multicommodity transportation network, taking into account that users are assigned to cheapest paths, and that demand is a linearly decreasing function of total path cost initial cost of carrying the products plus toll. We propose for its numerical solution three mixed quadratic formulations, either in arc or path flow space. Similar to what was achieved in the fixed demand case, we analyze the structure and properties of the problem, including its theoretical complexity. On the computational side, we analyze the sensitivity of central processing unit time with respect to two key parameters, namely, demand elasticity and percentage of toll arcs.

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  1. Network Pricing of Congestion-Free Networks: The Elastic and Linear Demand Case

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    Published In

    cover image Transportation Science
    Transportation Science  Volume 51, Issue 3
    August 2017
    239 pages

    Publisher

    INFORMS

    Linthicum, MD, United States

    Publication History

    Published: 01 August 2017
    Accepted: 23 April 2015
    Received: 09 January 2013

    Author Tags

    1. NP-hard
    2. bilevel programming
    3. linear demand
    4. networks
    5. pricing
    6. quadratic programming
    7. sensitivity analysis

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