Congestion and Incentives in the Age of Driverless Fleets

Federico Boffa, Alessandro Fedele and Alberto Iozzi

No BEMPS67, BEMPS - Bozen Economics & Management Paper Series from Faculty of Economics and Management at the Free University of Bozen

Abstract: Fleets of ridesharing companies, such as Uber and Lyft, are providing an increasing share of passenger travel. Autonomous vehicles will likely only magnify this trend. We analyze the welfare e ects of the transition from a decentralized regime, in which travelers are atomistic and do not internalize the congestion externality, to a centralized regime, where travelers are supplied by a monopolist's fleet. The monopolist can sort travelers across routes based on their congestion disutility, and ration them. A centralized regime is always welfare-reducing when the monopolist chooses not to ration travelers. We then characterize optimal road taxes throughout the transition.

Keywords: Congestion externality; fleets; autonomous vehicles; sorting; rationing (search for similar items in EconPapers)
JEL-codes: R11 R41 (search for similar items in EconPapers)
Pages: [45 pages]
Date: 2020-02
New Economics Papers: this item is included in nep-mic, nep-tre and nep-ure
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Related works:
Journal Article: Congestion and incentives in the age of driverless fleets (2023)
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