A Stackelberg game model of fare structure for public transport network

This paper shows how a public transport network fare structure could be determined so as to balance the passenger flow on the transport system and to reduce the overload delay of passengers. Considering passengers' behaviour in response of changing fare structure, a Stackelberg bilevel programming method is developed to determine the optimal fare structure. The upper-level problem seeks to minimise the total network cost, while the lower-level problem is stochastic user equilibrium transit assignment model with capacity constraints. A heuristic algorithm based on sensitivity analysis is developed. Finally, a numerical example is given to illustrate the procedure of the proposed model and algorithm.