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Micro-foundations of Congestion and Pricing: A Game Theory Perspective

David Levinson

No 200504, Working Papers from University of Minnesota: Nexus Research Group

Abstract: This paper develops congestion theory and congestion pricing theory from its microfoundations, the interaction of two or more vehicles. Using game theory, with a two-player game it is shown that the emergence of congestion depends on the players-relative valuations of early arrival, late arrival, and journey delay. Congestion pricing can be used as a cooperation mechanism to minimize total costs (if returned to the players). The analysis is then extended to the case of the three-player game, which illustrates congestion as a negative externality imposed on players who do not themselves contribute to it.

Keywords: Game Theory; Congestion; Queueing; Traffic Flow; Congestion Pricing; Road Pricing; Value Pricing . (search for similar items in EconPapers)
JEL-codes: C72 D10 R41 R48 (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (25)

Published in Transportation Research part A Volume 39, Issues 7-9 , August-November 2005, Pages 691-704.

Downloads: (external link)
http://hdl.handle.net/11299/179927 First version, 2007 (application/pdf)

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Journal Article: Micro-foundations of congestion and pricing: A game theory perspective (2005) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:nex:wpaper:microfoundations

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