A Bilevel Model of Taxation and Its Application to Optimal Highway Pricing

Martine Labbé
Martine Labbé
Institut de Statistique et Recherche Opérationnelle, Université Libre de Bruxelles, Boulevard du Triomphe, CP 210/01, B-1050 Bruxelles, Belgique
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Patrice Marcotte
Patrice Marcotte
Centre de recherche sur les Transports and Département d'Informatique et Recherche Opérationnelle, Université de Montréal, CP 6128, Succursale Centre-Ville, Montréal, Québec, Canada H3C 3J7
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Gilles Savard
Gilles Savard
GERAD and Département de mathématiques et génie industriel, Ecole Polytechnique de Montréal, CP 6079, Succursale Centre-Ville, Montréal, Québec, Canada H3C 3A7
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Institut de Statistique et Recherche Opérationnelle, Université Libre de Bruxelles, Boulevard du Triomphe, CP 210/01, B-1050 Bruxelles, Belgique

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Patrice Marcotte

Centre de recherche sur les Transports and Département d'Informatique et Recherche Opérationnelle, Université de Montréal, CP 6128, Succursale Centre-Ville, Montréal, Québec, Canada H3C 3J7

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Gilles Savard

GERAD and Département de mathématiques et génie industriel, Ecole Polytechnique de Montréal, CP 6079, Succursale Centre-Ville, Montréal, Québec, Canada H3C 3A7

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Published Online:1 Dec 1998https://doi.org/10.1287/mnsc.44.12.1608

Abstract

We consider a bilevel model where the leader wants to maximize revenues from a taxation scheme, while the follower rationally reacts to those tax levels. We focus our attention on the special case of a toll-setting problem defined on a multicommodity transportation network. We show that the general problem is NP-complete, while particular instances are polynomially solvable. Numerical examples are given.

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- On a class of bilevel programs

Volume 44, Issue 12-part-1

December 1998

Pages 1595-1722

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Published Online:December 01, 1998

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Martine Labbé, Patrice Marcotte, Gilles Savard, (1998) A Bilevel Model of Taxation and Its Application to Optimal Highway Pricing. Management Science 44(12-part-1):1608-1622.

https://doi.org/10.1287/mnsc.44.12.1608

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A Bilevel Model of Taxation and Its Application to Optimal Highway Pricing

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Volume 44, Issue 12-part-1

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