Scandinavian Working Papers in Economics

Working papers in Transport Economics,
CTS - Centre for Transport Studies Stockholm (KTH and VTI)

No 2011:7: Sharing profit in parallel and serial transport networks

Sofia Grahn-Voorneveld ()
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Sofia Grahn-Voorneveld: VTI, Postal: Centrum för Transportstudier (CTS), Teknikringen 10, 100 44 Stockholm, Sweden

Abstract: This paper studies the incentives for different countries to cooperate concerning pricing in transport systems, and how to handle the profit from such cooperation. Two types of simple networks with congestion are considered; one with parallel links, and one serial network with a number of consecutive links. The owner of each link tolls the traffic using the link. First the incentives for cooperative behavior among the countries are studied, and shown to be considerable. This is done by using non-cooperative game theory. Second, cooperative game theory is used to analyse solution concepts for allocating the resources raised from cooperation.

Keywords: Transport networks; game theory; cooperative game theory

JEL-codes: C71; C72; H71; L92; R41

45 pages, November 2, 2011

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