Urban Freight Transportation Planning : A Dynamic Stackelberg Game - Theoretic Approach

In this paper we propose a dynamic Stackelberg game-theoretic model for urban freight transportation planning which is able to characterize the interaction between freight and personal transportation in an urban area. The problem is formulated as a bi-level dynamic mathematical program with equilibrium constraints (MPEC) which belongs to a class of computationally challenging problems. The lower level is dynamic user equilibrium (DUE) with inhomogeneous traffic that characterizes traffic assignment of personal transportation given the schedule of freight transportation. The upper level is a system optimum (SO) freight transportation planning problem which aims at minimizing the total cost to a truck company. A mathematical program with complementarity constraints (MPCC) reformulation is derived and a projected gradient algorithm is designed to solve this computationally challenging problem. Numerical experiments are conducted to show that when planning freight transportation the background traffic is nonnegligible, even though the amount of trucks compared to other vehicles traveling on the same network is relatively small. What’s more, in our proposed bi-level model for urban freight transportation planning, we find a dynamic case of a Braess-like Paradox which can provide managerial insights to a metropolitan planning organization (MPO) in increasing social welfare by restricting freight movement.