The Relevance of Heterogeneity in a Congested Route Network with Tolls: An Analysis of Two Experiments Using Actual Waiting Times and Monetized Time Costs

John Lawrence Hartman

University of California at Santa Barbara, Economics Working Paper Series from Department of Economics, UC Santa Barbara

Abstract: Heterogeneity is important in some settings. One such instance involves congested networks with tolls, since people trade time for money at different rates. This paper reports results from two experiments that examine these issues. In both experiments, subjects choose between traveling on an indirect route that does not congest and a direct toll route that congests as more subjects travel on it. In the first experiment, values of time are assigned to subjects. Subjects generally sort themselves with high value-of-time subjects choosing the toll route. I also find that as the cost of deviating from the equilibrium prediction increases, subjects are more likely to make choices consistent with equilibrium. In other words, coordination problems diminish as value-of-time heterogeneity increases. The second experiment simulates a boring commute in which subjects must wait after the experimental rounds are finished. Subjects can give up money for reduced waiting time in this experiment by traveling on the toll route. In this experiment, some subjects travel the toll route frequently, giving up some of their payout in order to reduce their waiting time after the experiment. These choices are likely based on individuals’ values of time, since aggregate behavior differs by session. There is also evidence that subjects with time constraints travel the toll route more often than other subjects.

Keywords: congestion; Pigou-Knight-Downs paradox; experiment; toll; value of time; externalities; heterogeneity (search for similar items in EconPapers)
Date: 2007-11-01
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Citations: View citations in EconPapers (6)

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