Stackelberg Game Model of Railway Freight Pricing Based on Option Theory

Table 1

Summary of notations.

Notation	Descriptions
	Option price (unit capacity)
	Option strike price (unit capacity)
	Spot market freight rate (unit capacity) in time
	Probability density function of
	Distribution function of
N	Purchase amount of RFO
C	Unit capacity fixed cost
	Execution amount of RFO
	Capacity purchases amount through spot market
	Long-term preparation cost of transportation (unit capacity)
	Short-term preparation cost of transportation (unit capacity)
	Total capacity provided by railway freight transport
	Contract market capacity demand
	Spot market capacity demand
	Probability density function of freight demand
	Mean deviation
	Standard deviation