Dynamic Road Pricing for Revenue Maximization Modeling Framework and Solution Methodology

• Published in: Transportation research record Vol. 2345; no. 1; pp. 100 - 108
• Main Authors: Hassan, Ahmed, Abdelghany, Khaled, Semple, John
• Format: Journal Article
• Language: English
• Published: Los Angeles, CA SAGE Publications 2013
• Subjects: Computer networks; Dynamical systems; Dynamics; Mathematical models; Maximization; Pricing; Revenues; Traffic flow
• ISSN: 0361-1981; 2169-4052
• DOI: 10.3141/2345-13

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.