Urban Location and Transportation in the Information Age: A Multiclass, Multicriteria Network Equilibrium Perspective

Abstract

In this paper we propose a multiclass, multicriteria network equilibrium framework for urban location and transportation decisions in the Information Age, in which the advent of telecommunication networks may provide a substitute for physical transportation. The framework interprets the option of telecommuting as a transportation mode choice and considers three distinct scenarios: (1) residential locations are known, as well as the number of residents, and one seeks to determine their places of work, along with their optimal routes of travel; (2) places of employment are given and the numbers employed are known, but one wishes to determine their residential locations and their optimal travel routes; and (3) the total number of individuals are given and one seeks to determine their residential locations, their employment locations, as well as their optimal routes of travel between. We allow each class of decisionmaker to have his or her own set of criteria associated with the route and locational decisions. We identify the underlying network structures of the problems, derive the governing equilibrium conditions, and establish the equivalent variational inequality formulations. We provide qualitative properties and propose a computational procedure along with convergence results. We then apply the algorithm to a numerical example and its variants.