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Bi-level Game Model for Interaction between Arctic and Traditional Routes

  • Yangjun Wang (a1) and Ren Zhang (a1)

Abstract

This paper proposes a bi-level model from the perspective of game theory to describe the effect of the rise of Arctic shipping routes on traditional routes and their response. The upper-level model demonstrates the competition between shipping companies that maximise their own profits via speed adjustment, which can be presented as a generalised Nash equilibrium problem and is solved by the generalised reduced-gradient method. The lower-level model illustrates the response of customers who reassign their demands with an elastic total demand, which is presented as a logit-type multi-path assignment problem and is solved by the iterative balancing method. A case study is used to examine the rationality of the proposed model and algorithm.

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Keywords

Bi-level Game Model for Interaction between Arctic and Traditional Routes

  • Yangjun Wang (a1) and Ren Zhang (a1)

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