Group for Research in Decision Analysis

A Local Search Method for a Pricing Problem on a Transportation Network

Luce Brotcorne

In this presentation we consider the situation where the owner of a private toll highway seeks to maximize revenues raised from tolls set on a subset of arcs of a transportation network while the commuters aim to travel at minimum cost from their origin to their destination. For a given toll schedule, the commuters are assigned to shortest paths with respect to a generalized cost. This sequential and non cooperative decision-making process can be adequately represented as a bilevel program.

In this presentation, we first present the bilevel model for the toll setting problem we consider. Next, we describe a local search algorithm based on the characterization of feasible followers solutions as a set of paths and present numerical results.