Fair ticket pricing in public transport as a constrained cost allocation game

  • Ticket pricing in public transport usually takes a welfare maximization point of view. Such an approach, however, does not consider fairness in the sense that users of a shared infrastructure should pay for the costs that they generate. We propose an ansatz to determine fair ticket prices that combines concepts from cooperative game theory and linear and integer programming. The ticket pricing problem is considered to be a constrained cost allocation game, which is a generalization of cost allocation games that allows to deal with constraints on output prices and on the formation of coalitions. An application to pricing railway tickets for the intercity network of the Netherlands is presented. The results demonstrate that the fairness of prices can be improved substantially in this way. A preliminary version of this paper appeared in the Proceedings of HPSC 2009 (Borndörfer and Hoang 2012). This journal article introduces better model and algorithms.

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Author:Ralf Borndörfer, Nam-Dung Hoang
Document Type:Article
Parent Title (English):Annals of Operations Research
Volume:226
First Page:51
Last Page:68
Year of first publication:2014
DOI:http://dx.doi.org/10.1007/s10479-014-1698-z

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