Chapter 9 - Models of Transportation Market

Abstract

In this chapter we consider the competition model on a transportation network. That is a market where the customers are distributed in the nodes of a transportation graph. The nodes of the graph represent the hubs (bus stops, airports, railway stations, etc.) while its edges correspond to the transportation links (railways, car, air lines, etc.). The customers in a node are the passengers who use this kind of transportation. The demand is determined by the passenger traffic. There are n companies (players) delivering a service in the market. Each player has some units of a resource. He distributes the resource among links of the graph. The game has three stages as follows [35]. The players simultaneously distribute their resources among the links of the graph. Then the players simultaneously announce the prices for their resources. After that the customers choose a preferable service and the players obtain the payoffs depending on their transportation networks and prices. For the service market over the transportation graph we will construct a Nash equilibrium in the allocation game and also in the pricing game. We demonstrate how it can be used for modeling of air transportation market.