A Bilevel Optimization Framework for Power–Traffic Network Coordination with Incentive-Based Driver Decisions

Electric vehicles have strengthened the coupling between transportation systems and power distribution networks, giving rise to new challenges in the coordinated management of traffic flow and charging demand. Monetary incentives, such as tariffs and subsidies, have been widely adopted to influence drivers’ route and charging decisions and to improve system-level performance. This paper proposes a user-centric incentive framework in which a system operator allocates rewards to guide drivers’ behavior, thereby enabling coordinated operation of power–traffic networks. A reward scheme is developed to provide joint subscription-based and path-based incentives that account for drivers’ behavioral responses through a logit choice model for scheme adoption embedded within a traffic assignment model. The resulting interaction is formulated as a bilevel optimization problem, in which a coupled power–traffic system operator determines incentive schemes to achieve system optimality within a given budget constraint, while individual drivers respond by selecting routes and charging strategies to minimize their perceived travel costs. A single-level Karush–Kuhn–Tucker (KKT) reformulation is developed, and linearization techniques are employed to compute the resulting equilibrium, yielding a tractable mixed-integer second-order cone program (MISOCP). Numerical experiments demonstrate the effectiveness of the subscription-based and path-based reward schemes in improving network performance and budget saving.