Existence of anonymous link tolls for system optimum on networks with mixed equilibrium behaviors

Hai Yang and Xiaoning Zhang

Transportation Research Part B: Methodological, 2008, vol. 42, issue 2, 99-112

Abstract: The notions of user equilibrium (UE) and system optimum (SO) often allude to the literature together with the well-known principle of marginal-cost pricing in traffic network analyses. This pricing principle states that the UE flow pattern on a network can be driven to an SO in the sense of total travel cost minimization by charging a toll on each link equal to the difference between marginal social cost and marginal private cost. In reality, users do not always behave in a UE manner, typically when there exist oligopoly Cournot-Nash (CN) firms. Users in a CN firm cooperate among themselves to minimize total cost of the firm and compete against others. In the presence of such UE-CN mixed equilibrium behaviors, we are interested in whether an SO flow pattern remains attainable by meaningful link tolls. In this paper we show that in a network with both UE and CN users, applying the traditional marginal-cost pricing for a system optimum requires that link tolls be differentiated across user classes. Because users differ from one another in an unobservable way, it is impossible to introduce discriminatory tolling on a network in a mixed behaviour equilibrium. We then seek alternative meaningful tolls by establishing the existence of nonnegative anonymous link tolls to decentralize the SO into a UE-CN mixed behavior equilibrium with resort to a rigorous mathematical programming approach.

Date: 2008
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