A note on toll competition on private roads: To lead or not to lead?

Simon Shepherd, Agachai Sumalee

Research output: Chapter in book / Conference proceedingConference article published in proceeding or bookAcademic researchpeer-review

1 Citation (Scopus)

Abstract

Toll competition between to private operators who wish to maximise their own profit is either modelled as a Nash game leading to lower profits than could be obtained in a collusive optimum or as a Stackelberg game whereby one operator is assumed to lead the process and anticipate the response of the follower. In previous examples it has been shown that the leader may be worse off than the follower. In this paper we examine the conditions under which one or both of the operators prefers to lead and conversely when they prefer to follow. We vary the capacities and free flow times of the two roads and find that when free flow times are equal there is no capacity combination where either player prefers to lead. Even when a player has an advantage in free flow time the region where this player prefers to lead is limited. Finally we look at the welfare implications of the results and find that where society would prefer one player to lead, that player prefers to follow.
Original languageEnglish
Title of host publicationProceedings of the 13th International Conference of Hong Kong Society for Transportation Studies
Subtitle of host publicationTransportation and Management Science
Pages793-802
Number of pages10
Publication statusPublished - 1 Dec 2008
Event13th International Conference of Hong Kong Society for Transportation Studies: Transportation and Management Science - Kowloon, Hong Kong
Duration: 13 Dec 200815 Dec 2008

Conference

Conference13th International Conference of Hong Kong Society for Transportation Studies: Transportation and Management Science
Country/TerritoryHong Kong
CityKowloon
Period13/12/0815/12/08

ASJC Scopus subject areas

  • Transportation

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