Dynamic pricing in an urban freight environment

Terry L. Friesz, Reetabrata Mookherjee, José Holguín-Veras, Matthew A. Rigdon

Research output: Contribution to journalArticle

24 Scopus citations

Abstract

In this paper, we propose a dynamic, game theoretic model of dynamic pricing in an urban freight environment with three main entities: sellers, transporters and receivers. The sellers and transporters are modelled as non-cooperative Cournot-Nash agents. The sellers compete to capture receiver input factor demands, while the transporters compete to capture the transportation demand generated by the seller/receiver transactions. Each competing agent's extremal problem is formulated as an optimal control problem and the set of these coupled optimal control problems is transformed into a differential variational inequality representing the general Nash equilibrium problem. A nonlinear complementarity problem is also formulated and used to solve a numerical example.

Original languageEnglish (US)
Pages (from-to)305-324
Number of pages20
JournalTransportation Research Part B: Methodological
Volume42
Issue number4
DOIs
StatePublished - May 2008

All Science Journal Classification (ASJC) codes

  • Civil and Structural Engineering
  • Transportation

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