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An MPEC approach to second-best toll pricing

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Abstract.

This paper addresses two second-best toll pricing problems, one with fixed and the other with elastic travel demands, as mathematical programs with equilibrium constraints. Several equivalent nonlinear programming formulations for the two problems are discussed. One formulation leads to properties that are of interest to transportation economists. Another produces an algorithm that is capable of solving large problems and easy to implement with existing software for linear and nonlinear programming problems. Numerical results using transportation networks from the literature are also presented.

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Authors and Affiliations

  1. Department of Industrial and Systems Engineering, University of Florida, Gainesville, FL 32611-6595, USA

    Siriphong Lawphongpanich & Donald W. Hearn

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  1. Siriphong Lawphongpanich
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  2. Donald W. Hearn
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Correspondence to Siriphong Lawphongpanich.

Additional information

This research was partially supported by NSF grants DMI-9978642 and DMI-0300316.

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Lawphongpanich, S., Hearn, D. An MPEC approach to second-best toll pricing. Math. Program., Ser. A 101, 33–55 (2004). https://doi.org/10.1007/s10107-004-0536-5

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