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

• Published in: Journal of Navigation
• Main Authors: Wang, Yangjun, Zhang, Ren
• Format: Article in Journal/Newspaper
• Language: English
• Published: Cambridge University Press (CUP) 2018
• Subjects: Ocean Engineering; Oceanography; Arctic; Nash
• Online Access: http://dx.doi.org/10.1017/s0373463318000759; https://www.cambridge.org/core/services/aop-cambridge-core/content/view/S0373463318000759

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.