Information and Usage of Congestible Facilities Under Different Pricing Regimes

Charles Lindsey () and André de Palma ()

Canadian Journal of Economics, 1998, vol. 31, issue 3, 666-692

Abstract: Uncertainty about usage conditions is common in many congestible facilities. In this paper, the authors consider the effects of providing information to prospective users under three regimes: free access, nonresponsive congestion tolling, and responsive tolling based on current information. With either free access or nonresponsive tolling better information can induce changes in usage that reduce expected social surplus. But responsive tolling assures that better information is welfare improving. The joint welfare gains from providing information and tolling can be larger or smaller than the sum of the gains from implementing each independently. Superadditivity is likely to obtain when demand is price elastic.

Date: 1998
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