Tradable permits to manage urban mobility: market design and experimental implementation

Devi Brands (), Erik Verhoef, Jasper Knockaert () and Paul Koster
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Devi Brands: VU Amsterdam
Jasper Knockaert: VU Amsterdam

No 19-007/VIII, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: Congestion levels have grown substantially in recent years, while the traditional economic response to congestion – road pricing – remains politically infeasible in most locations. Tradable permits are likely to be a more viable alternative, because they do not require a net financial flow from road users to the government. It is therefore the right moment to design and empirically test tradable permit schemes for managing urban mobility. This paper presents and empirically tests a complete design of a market for tradable permits, both in terms of the conceptual set-up of the market as well as its technical implementation. The design is evaluated against a number of criteria, including: transparency and containment of transaction costs, stability of permit prices in relation to the dynamic equilibrium on the mobility market and the prevention of undesirable speculation and fraud. We present evidence of the empirical functioning of this market, using the results of a conducted lab-in-the-field experiment with virtual mobility behaviour and real financial incentives.

Keywords: Mobility credits; Tradable credits scheme; Permit experiment; Permit market (search for similar items in EconPapers)
JEL-codes: H23 Q58 R41 R48 (search for similar items in EconPapers)
Date: 2019-01-27
New Economics Papers: this item is included in nep-reg and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Journal Article: Tradable permits to manage urban mobility: Market design and experimental implementation (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20190007

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