A Game-Theoretic Framework for Enhancing Cooperation in Network Design Problems

Abstract

The decisions of self-interested operators may lead to suboptimal outcomes. In this study, we propose a game theoretical framework to enhance cooperation in multi-region network design problems. We propose two network design games to explore regional collaboration: In the NonCooperative Network Design Game with Inter-Regional Investment, regions allow cross-border investments while retaining profits generated locally; In Cooperative Network Design Game, the Co-Investment and Payoff-Sharing Mechanism is introduced, enabling regions to jointly optimize the network for better overall payoffs and fairly distribute the benefits. A case study on the ZurichWintertur bus network is conducted to demonstrate the efficiency of the proposed framework.