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Sharing profit in parallel and serial transport networks

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Abstract

This paper studies the incentives for different countries to cooperate concerning pricing in transport systems, and how to handle the profit from such cooperation. Two types of simple networks with congestion are considered; one with parallel links, and one serial network with a number of consecutive links. The owner of each link tolls the traffic using the link. First the incentives for cooperative behavior among the countries are studied, and shown to be considerable. This is done by using non-cooperative game theory. Second, cooperative game theory is used to analyse solution concepts for allocating the resources raised from cooperation.

Suggested Citation

  • Grahn-Voorneveld, Sofia, 2011. "Sharing profit in parallel and serial transport networks," Working papers in Transport Economics 2011:7, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    • Handle: RePEc:hhs:ctswps:2011_007
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    File URL: http://www.transportportal.se/SWoPEc/CTS2011-7.pdf
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    References listed on IDEAS

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    1. Bassanini, Anna & Pouyet, Jerome, 2005. "Strategic choice of financing systems in regulated and interconnected industries," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 233-259, February.
    2. De Borger, B. & Dunkerley, F. & Proost, S., 2007. "Strategic investment and pricing decisions in a congested transport corridor," Journal of Urban Economics, Elsevier, vol. 62(2), pages 294-316, September.
    3. Agrell Per J. & Pouyet Jerome, 2008. "Regulatory Competition in Network Interconnection Pricing," Review of Network Economics, De Gruyter, vol. 7(1), pages 1-25, March.
    4. De Borger, B. & Proost, S. & Van Dender, K., 2005. "Congestion and tax competition in a parallel network," European Economic Review, Elsevier, vol. 49(8), pages 2013-2040, November.
    5. Small, Kenneth A. & Yan, Jia, 2001. "The Value of "Value Pricing" of Roads: Second-Best Pricing and Product Differentiation," Journal of Urban Economics, Elsevier, vol. 49(2), pages 310-336, March.
    6. Borger Bruno De & Dunkerley Fay & Proost Stef, 2008. "The Interaction between Tolls and Capacity Investment in Serial and Parallel Transport Networks," Review of Network Economics, De Gruyter, vol. 7(1), pages 1-23, March.
    7. Kurt Van Dender, 2005. "Duopoly prices under congested access," Journal of Regional Science, Wiley Blackwell, vol. 45(2), pages 343-362, May.
    8. Verhoef, Erik & Nijkamp, Peter & Rietveld, Piet, 1996. "Second-Best Congestion Pricing: The Case of an Untolled Alternative," Journal of Urban Economics, Elsevier, vol. 40(3), pages 279-302, November.
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    10. Small, Kenneth A., 2001. "The Value of Pricing," University of California Transportation Center, Working Papers qt0rm449sx, University of California Transportation Center.
    11. Van Dender, Kurt, 2005. "Duopoly Prices Under Congested Access," University of California Transportation Center, Working Papers qt7xw8c3fn, University of California Transportation Center.
    12. David Levinson, 2001. "Why States Toll: An Empirical Model of Finance Choice," Journal of Transport Economics and Policy, University of Bath, vol. 35(2), pages 223-237, May.
    13. repec:bpj:rneart:v:7:y:2008:i:1:p:111-135 is not listed on IDEAS
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    Cited by:

    1. Miroslav Prokić, 2023. "The applicability of Cooperative Game Theory in Rail Freight Corridors Framework," Shaping Post-COVID World – Challenges for Economic Theory and Policy, in: Aleksandra Praščević & Miomir Jakšić & Mihail Arandarenko & Dejan Trifunović & Milutin Ješić (ed.),Shaping Post-COVID World – Challenges for Economic Theory and Policy, chapter 14, pages 305-320, Faculty of Economics and Business, University of Belgrade.
    2. repec:beo:swcetp:23-14 is not listed on IDEAS
    3. Aleksandra Praščević & Miomir Jakšić & Mihail Arandarenko & Dejan Trifunović & Milutin Ješić (ed.), 2023. "Shaping Post-COVID World – Challenges for Economic Theory and Policy," Shaping Post-COVID World – Challenges for Economic Theory and Policy, Faculty of Economics and Business, University of Belgrade, number 23, October –.

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    More about this item

    Keywords

    Transport networks; game theory; cooperative game theory;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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