A game theoretical analysis of metro-integrated city logistics systems

Abstract

The spare capacity of metro systems during non-peak hours can be utilized to transport parcels or freight, i.e., metro-integrated logistics systems (MILS). Existing studies regarding MILS mainly focused on operational level issues, e.g., parcel distribution problem and service scheduling problem. Little has been done to understand the strategic interactions between metro and logistics operators in the context of MILS and the resulting system-wide impacts. This study conducts a game theoretical analysis of MILS, where a metro company and a logistics company may work either independently or jointly (non-cooperative or cooperative games). In particular, the logistic company decides the number of parcels assigned to MILS, and the metro company controls the price of the MILS service. We examine the decisions of the metro company and the logistics company under different market power regimes, and quantify the system performance. Numerical studies are conducted to illustrate the analytical observations and provide further understanding. Our results show that introducing MILS has the potential to generate Pareto-improving outcomes for the metro company and the logistics company.