Comparison of Methods for Allocating Costs of Empty Railcar Movements in a Railcar Pooling System

Abstract

Allocating the cost of empty railcar miles to partners in a railcar pooling system is an important pricing problem in railway management. Recently, the authors of this paper proposed a cost allocation scheme for empty railcar movements based on game theory that explicitly considers the level of participation and contribution from each partner, the costs generated before and after cooperation, and the overall benefit obtained by each partner because of cooperation. This paper compares the performance of the model with three other cost allocation models with respect to fairness, stability, and computational efficiency. The comparison is made with two scenarios adapted from examples documented in the literature. The results indicate that the cost allocation scheme based on game theory outperforms other methods in ensuring fairness and enhancing stability in a coalition. Most remarkably, it yields reasonable results even in situations in which other models behave poorly. Computationally, it is manageable for practical problems.