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Partial peak-load pricing of a transportation bottleneck with homogeneous and heterogeneous values of time

Ralph M. Braid

Economics of Transportation, 2018, vol. 16, issue C, 29-41

Abstract: The first-best solution for a transportation bottleneck is to impose a first-best peak-load toll that varies continuously over time, reaching its maximum value at the most desirable crossing time. This eliminates all wasteful queueing. With homogeneous values of time, the private costs of consumers are unchanged, but the large maximum value of the first-best toll may make it politically infeasible. In this paper, I consider continuously time-varying partial peak-load tolls that have a much lower maximum value, but which still achieve a large fraction of the efficiency gain of the first-best toll. With heterogeneous values of time, a partial peak-load toll can leave all consumers with unchanged or decreased private costs even when the first-best toll does not do this.

Keywords: Bottleneck; Bridge; Peak-load toll; Time-varying toll (search for similar items in EconPapers)
JEL-codes: R41 R48 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:ecotra:v:16:y:2018:i:c:p:29-41