Dynamic Pricing in an Urban Freight Environment

Open Access
Rigdon, Matthew Alden
Graduate Program:
Industrial Engineering
Master of Science
Document Type:
Master Thesis
Date of Defense:
Committee Members:
  • Terry Lee Friesz, Thesis Advisor
  • dynamic pricing
  • differential games
  • urban freight
This thesis proposes a dynamic, game-theoretic model of dynamic pricing in an urban freight environment with three distinct agent types: sellers, transporters and receivers. The sellers and transporters are modeled as non-cooperative Nash agents. The sellers compete to capture receiver demands, while the transporters compete to capture the transportation demand generated by the seller-receiver transactions. Each competing agent’s best response problem is formulated as an optimal control problem and the set of these coupled optimal control problems is transformed into a differential variational inequality representing the general Nash equilibrium problem. A time discretization approximation is utilized to recast the game as a finite dimensional nonlinear complementarity problem. The solution of a small numerical example gives insights into the equilibrium strategies of the different agents in an urban freight system.