Eliciting Coordination with Rebates

A rebate-based mechanism aimed at reducing urban network congestion is considered in this article. In order for enough commuters to switch to underused modes, the framework helps to select rebate levels. Congestion can be significantly improved by getting a relatively small number of drivers to switch to public transportation. A Stackelberg game in which rebates are offered by the transportation authority is used to model this mechanism, and the costs of each mode are factored into the rebates by participants. When participants select one of the transportation modes with the lowest updated costs, a new Wardrop equilibrium arises. When choosing rebate levels, not only the potential reduction of the participant's cost is taken into account, but also the cost of providing those rebates. The savings that arise from the more efficient use of capacity may provide part of the budget for rebates. The authors characterize the game's Stackelberg equilibria, and describe a polynomial-time algorithm to compute each mode's optimal rebates. The authors additionally provide tight results on the worst-case inefficiency of the resulting Wardrop equilibrium, measured by the so-called price of anarchy. Specifically, the authors describe the tradeoff between owner sensitivity towards rebate cost and worst-case system inefficiency.

  • Availability:
  • Authors:
    • Maille, Patrick
    • Stier-Moses, Nicolas E
  • Publication Date: 2009-11


  • English

Media Info

  • Media Type: Print
  • Features: Appendices; Figures; References;
  • Pagination: pp 473-492
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 01149178
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jan 22 2010 12:15PM