In congested urban areas, it remains a pressing challenge to reduce unnecessary vehicle circling
for parking while at the same time maximize parking space utilization. In observance
of new information technologies that have become readily accessible to drivers and parking
agencies, we develop a dynamic non-cooperative bi-level model (i.e. Stackelberg leader–follower
game) to set parking prices in real-time for effective parking access and
space utilization. The model is expected to fit into an integrated parking pricing and management
system, where parking reservations and transactions are facilitated by sensing
and informatics infrastructures, that ensures the availability of convenient spaces at equilibrium
market prices. It is shown with numerical examples that the proposed dynamic
parking pricing model has the potential to virtually eliminate vehicle circling for parking,
which results in significant reduction in adverse socioeconomic externalities such as traffic
congestion and emissions.