An Approximation Algorithm for Stackelberg Network Pricing

S. Roch; P. Marcotte; G. Savard

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arXiv · cs/0409054

An Approximation Algorithm for Stackelberg Network Pricing

S. Roch·P. Marcotte·G. Savard

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Abstract

We consider the problem of maximizing the revenue raised from tolls set on the arcs of a transportation network, under the constraint that users are assigned to toll-compatible shortest paths. We first prove that this problem is strongly NP-hard. We then provide a polynomial time algorithm with a worst-case precision guarantee of ${1/2}\log_2 m_T+1$, where $m_T$ denotes the number of toll arcs. Finally we show that the approximation is tight with respect to a natural relaxation by constructing a family of instances for which the relaxation gap is reached.

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BibTeX RIS

S. Roch, P. Marcotte, G. Savard. 2004-09-27. An Approximation Algorithm for Stackelberg Network Pricing. https://arxiv.org/abs/cs/0409054

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