Non-cooperative game pricing strategy for maximizing social welfare in electrified transportation networks

Abstract This paper proposes a non-cooperative game pricing strategy framework by the approach of profit-sharing and user equilibrium principles, - to maximize the social welfare of the electrified transportation system stakeholders consisting of electricity wholesalers, fast charging stations, and electric vehicle users. Electricity wholesalers propose profit-sharing contracts to sell electricity to each fast charging station. Fast charging stations compete with each other to develop the optimal retail price while considering their electricity selling revenue and the traveling cost of electric vehicle users for the purpose of maximal social welfare. Non-cooperative game competition between fast charging stations is formulated as a generalized Nash game. Wardrop user equilibrium principle is applied for path selection for electric vehicle users. A Newton-type fixed-point algorithm is developed to solve the generalized Nash equilibrium point. Meanwhile, the nonlinear program is solved by the commercial solver KNITRO. A case study demonstrates the effectiveness of the proposed pricing strategy in maximizing the total profits of the fast charging station retailers, wholesalers, and electric vehicle users.