 Optimal congestion pricing with diverging long-run and short-run scheduling preferencesTransportation Research Part B: Methodological, 2020, vol. 134, issue C, 191-209 Abstract: Traffic congestion is among the main market failures in modern cities. Dynamic marginal external cost pricing is the textbook economic response to this externality. Recent empirical work has shown that there is an important distinction between short-run departure time choice versus long-run routine formation of commuters, also characterized by differences in values of time and schedule delays for the short-run versus the long-run problem. This paper investigates whether this affects optimal pricing of congested roads. Using a dynamic model of congestion, and integrating it with a dynamic model of routine formation, it is found that contrary to expectation, short-run optimal congestion pricing alone cannot optimally decentralize the optimal formation of long-run routines. A separate instrument is therefore needed to optimize routine formation. Keywords: Congestion pricing; Dynamic traffic congestion; Scheduling (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:transb:v:134:y:2020:i:c:p:191-209 Ordering information: This journal article can be ordered from DOI: 10.1016/j.trb.2020.02.009 Access Statistics for this article Transportation Research Part B: Methodological is currently edited by Fred Mannering More articles in Transportation Research Part B: Methodological from Elsevier |
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