Transportation and dynamic networks: Models, theory, and applications to supply chains, electric power, and financial networks

Network systems, including transportation and logistic systems, electric power generation and distribution networks as well as financial networks, provide the critical infrastructure for the functioning of our societies and economies. The understanding of the dynamic behavior of such systems is also crucial to national security and prosperity.;The identification of new connections between distinct network systems is the inspiration for the research in this dissertation. In particular, I answer two questions raised by Beckmann, McGuire, and Winsten (1956) and Copeland (1952) over half a century ago, which are, respectively, how are electric power flows related to transportation flows and does money flow like water or electricity?;In addition, in this dissertation, I achieve the following: (1) I establish the relationships between transportation networks and three other classes of complex network systems: supply chain networks, electric power generation and transmission networks, and financial networks with intermediation. The establishment of such connections provides novel theoretical insights as well as new pricing mechanisms, and efficient computational methods. (2) I develop new modeling frameworks based on evolutionary variational inequality theory that capture the dynamics of such network systems in terms of the time-varying flows and incurred costs, prices, and, where applicable, profits. This dissertation studies the dynamics of such network systems by addressing both internal competition and/or cooperation, and external changes, such as varying costs and demands. (3) I focus, in depth, on electric power supply chains. By exploiting the relationships between transportation networks and electric power supply chains, I develop a large-scale network model that integrates electric power supply chains and fuel supply markets. The model captures both the economic transactions as well as the physical transmission constraints. The model is then applied to the New England electric power supply chain consisting of 6 states, 5 fuel types, 82 power generators, with a total of 573 generating units, and 10 demand markets. The empirical case study demonstrates that the regional electricity prices simulated by the model match very well the actual electricity prices in New England. I also utilize the model to study interactions between electric power supply chains and energy fuel markets.