Dynamic Road Pricing for Revenue Maximization

Abstract

A modeling framework and a solution methodology are presented for the toll problem of dynamic revenue maximization. The problem requires determining the optimal time-varying toll prices for a multigantry toll road facility so that total revenue is maximized subject to agency-mandated constraints on average speed and average traffic volume. The framework extends a real-time traffic network state estimation and prediction system to provide dynamic pricing capabilities. The presented framework overcomes limitations of most existing approaches by considering two factors: consistency between the toll value and drivers’ willingness-to-pay behavior and drivers’ route choice dynamics in regard to competition between the toll facility and alternative routes. The paper presents the results of a set of simulation-based experiments that were conducted to examine the robustness of the proposed prices under several operational scenarios.