| The competition between a new publicly-owned cross-border bridge and the existing Ambassador Bridge is modeled in this thesis as a duopoly game where each bridge's strategy is its toll level. We assume the Ambassador Bridge always wants to maximize its profit, while the new bridge may have various objective functions. The competition between the two bridges has a natural bi-level structure, with the upper level being the two bridges setting their respective tolls, and the lower level being the road users choosing their routes. The competition equilibrium (i.e. Nash equilibrium) emerges when each bridge cannot improve its objective function by unilaterally changing its truck toll level. The Mesh Method is employed to solve this bi-level equilibrium problem in a simulation context. The obtained results of different competition regimes provide valuable insights about the nature of the toll competition that will likely emerge in the future. |
