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Fair ticket pricing in public transport as a constrained cost allocation game

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  • Ralf Borndörfer
  • Nam-Dũng Hoang

Abstract

Ticket pricing in public transport usually takes a welfare maximization point of view. Such an approach, however, does not consider fairness in the sense that users of a shared infrastructure should pay for the costs that they generate. We propose an ansatz to determine fair ticket prices that combines concepts from cooperative game theory and linear and integer programming. The ticket pricing problem is considered to be a constrained cost allocation game, which is a generalization of cost allocation games that allows to deal with constraints on output prices and on the formation of coalitions. An application to pricing railway tickets for the intercity network of the Netherlands is presented. The results demonstrate that the fairness of prices can be improved substantially in this way. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Ralf Borndörfer & Nam-Dũng Hoang, 2015. "Fair ticket pricing in public transport as a constrained cost allocation game," Annals of Operations Research, Springer, vol. 226(1), pages 51-68, March.
    • Handle: RePEc:spr:annopr:v:226:y:2015:i:1:p:51-68:10.1007/s10479-014-1698-z
    DOI: 10.1007/s10479-014-1698-z
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    Cited by:

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