A heuristic algorithm solving bilevel toll optimization problems

Purpose – One of the most important problems concerning the toll roads is the setting of an appropriate cost for traveling through private arcs of a transportation network. The purpose of this paper is to consider this problem by stating it as a bilevel programming (BLP) model. At the upper level, one has a public regulator or a private company that manages the toll roads seeking to increase its profits. At the lower level, several companies-users try to satisfy the existing demand for transportation of goods and/or passengers, and simultaneously, to select the routes so as to minimize their travel costs. In other words, what is sought is kind of a balance of costs that bring the highest profit to the regulating company (the upper level) and are still attractive enough to the users (the lower level). Design/methodology/approach – With the aim of providing a solution to the BLP problem in question, a direct algorithm based on sensitivity analysis (SA) is proposed. In order to make it easier to move (if nec...