Stackelberg Game Model of Railway Freight Pricing Based on Option Theory
In recent years, although rail transport has contributed significantly to the productivity of the Chinese economy, it has also been faced with the fierce competition and challenge from other modes of transportation, and therefore, freight-pricing issue has received more attention by researchers. In...
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| Format: | Article |
| Language: | English |
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Wiley
2020-01-01
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| Series: | Discrete Dynamics in Nature and Society |
| Online Access: | http://dx.doi.org/10.1155/2020/6436729 |
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| author | Jingwei Guo Zhongqi Xie Qinglin Li |
| author_facet | Jingwei Guo Zhongqi Xie Qinglin Li |
| author_sort | Jingwei Guo |
| collection | DOAJ |
| description | In recent years, although rail transport has contributed significantly to the productivity of the Chinese economy, it has also been faced with the fierce competition and challenge from other modes of transportation, and therefore, freight-pricing issue has received more attention by researchers. In this paper, the rail freight option (RFO) based on option theory is proposed to study the optimal pricing decision of the railway transportation enterprise and contract customers’ optimal purchase decisions. To obtain an effective RFO contract, the railway freight contract transaction process is first analyzed. Then, the theoretical framework for the RFO contract trading is put forward in the railway freight market. Next, a two-stage Stackelberg game theoretic approach is presented based on the principle of utility maximization to achieve the optimal decision of RFO contract. Subsequently, the reverse reasoning method in dynamic programming is used to solve the optimal combination decision of the contract customer. Finally, the optimal pricing decision of RFO is discussed using Kuhn–Tucker conditions and Lagrangian function. The result shows that the railway transportation enterprise should pay more attention to the option strike price w1 in terms of maximizing system utility and achieving Pareto optimal. |
| format | Article |
| id | doaj-art-343683f7a5204371845ff3ba531ffe8e |
| institution | Kabale University |
| issn | 1026-0226 1607-887X |
| language | English |
| publishDate | 2020-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Discrete Dynamics in Nature and Society |
| spelling | doaj-art-343683f7a5204371845ff3ba531ffe8e2025-02-03T05:44:12ZengWileyDiscrete Dynamics in Nature and Society1026-02261607-887X2020-01-01202010.1155/2020/64367296436729Stackelberg Game Model of Railway Freight Pricing Based on Option TheoryJingwei Guo0Zhongqi Xie1Qinglin Li2School of Energy Science and Engineering, Henan Polytechnic University, Jiaozuo 454000, ChinaSchool of Energy Science and Engineering, Henan Polytechnic University, Jiaozuo 454000, ChinaSchool of Transportation and Logistics, Southwest Jiaotong University, Chengdu 610031, ChinaIn recent years, although rail transport has contributed significantly to the productivity of the Chinese economy, it has also been faced with the fierce competition and challenge from other modes of transportation, and therefore, freight-pricing issue has received more attention by researchers. In this paper, the rail freight option (RFO) based on option theory is proposed to study the optimal pricing decision of the railway transportation enterprise and contract customers’ optimal purchase decisions. To obtain an effective RFO contract, the railway freight contract transaction process is first analyzed. Then, the theoretical framework for the RFO contract trading is put forward in the railway freight market. Next, a two-stage Stackelberg game theoretic approach is presented based on the principle of utility maximization to achieve the optimal decision of RFO contract. Subsequently, the reverse reasoning method in dynamic programming is used to solve the optimal combination decision of the contract customer. Finally, the optimal pricing decision of RFO is discussed using Kuhn–Tucker conditions and Lagrangian function. The result shows that the railway transportation enterprise should pay more attention to the option strike price w1 in terms of maximizing system utility and achieving Pareto optimal.http://dx.doi.org/10.1155/2020/6436729 |
| spellingShingle | Jingwei Guo Zhongqi Xie Qinglin Li Stackelberg Game Model of Railway Freight Pricing Based on Option Theory Discrete Dynamics in Nature and Society |
| title | Stackelberg Game Model of Railway Freight Pricing Based on Option Theory |
| title_full | Stackelberg Game Model of Railway Freight Pricing Based on Option Theory |
| title_fullStr | Stackelberg Game Model of Railway Freight Pricing Based on Option Theory |
| title_full_unstemmed | Stackelberg Game Model of Railway Freight Pricing Based on Option Theory |
| title_short | Stackelberg Game Model of Railway Freight Pricing Based on Option Theory |
| title_sort | stackelberg game model of railway freight pricing based on option theory |
| url | http://dx.doi.org/10.1155/2020/6436729 |
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