- Design and analysis of an approximation algorithm for Stackelberg network pricing Sebastien Roch (sebastien.rochpolymtl.ca) Patrice Marcotte (marcotteiro.umontreal.ca) Gilles Savard (gillescrt.umontreal.ca) Abstract: We consider the problem of maximizing the revenue raised from tolls set on the arcs of a transportation network, under the constraint that users are assigned to toll-compatible shortest paths. We first prove that this problem is strongly NP-hard. We then provide a polynomial time algorithm with a worst-case precision guarantee of $\frac{1}{2}\log m_T+1$, where $m_T$ denotes the number of toll arcs. Finally we show that the approximation is tight with respect to a natural relaxation by constructing a family of instances for which the relaxation gap is reached. Keywords: network pricing, approximation algorithms, Stackelberg games, combinatorial optimization, NP-hard problems Category 1: Combinatorial Optimization Category 2: Network Optimization Citation: Cahiers du GERAD, G-2002-61, HEC Montreal, Montreal, Canada, november 2002. Download: [Postscript][PDF]Entry Submitted: 03/18/2003Entry Accepted: 03/18/2003Entry Last Modified: 03/18/2003Modify/Update this entry Visitors Authors More about us Links Subscribe, Unsubscribe Digest Archive Search, Browse the Repository Submit Update Policies Coordinator's Board Classification Scheme Credits Give us feedback Optimization Journals, Sites, Societies Optimization Online is supported by the Mathematical Programming Society and by the Optimization Technology Center.