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Dynamic pricing in an urban freight environment
All authors:
Terry L. Friesz, Reetabrata Mookerjee, José Holguin-Veras, Matthew A. Rigdon
Host organisation:
CoE Rensselaer, USA
Publication year: 2008
Published in:
Elsevier, Transportation Research
Research theme: Policy and Planning, Urban Freight
Keywords:
Dynamic pricing, Urban freight, Dynamic game, Differential variational inequality
Type:
Research article
Summary:
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.
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