Extending our earlier work on the implications of toll competition between cities, this paper studies a variant of an Equilibrium Problem with Equilibrium Constraints (EPEC). Our previous research under a Wardrop User...
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ISBN:
(纸本)9789881581419
Extending our earlier work on the implications of toll competition between cities, this paper studies a variant of an Equilibrium Problem with Equilibrium Constraints (EPEC). Our previous research under a Wardrop User Equilibrium route choice setting demonstrated that such competition could potentially result in multiple Nash Equilibria (NE). Hence cities could end up in a Prisoner's Dilemma where they are worse off as a result of being incentivised to engage in the game. Switching to a logit based Stochastic User Equilibrium (SUE) framework, this paper investigates the existence of multiple equilibria through simulations. In addition, we are able to implement a gradient based solution algorithm for the EPEC. We show that the issue of multiple NE continues to exist for a wide range of dispersion parameter assumptions studied but that as dispersion increases then the smoothing process of SUE can reduce the problem to having only one NE which can have significant implications for optimal tolls and regulation policy.
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