The independence of volume-capacity ratio of private toll roads in general networks

Di Wu, Yafeng Yin and Hai Yang

Transportation Research Part B: Methodological, 2011, vol. 45, issue 1, 96-101

Abstract: In a general traffic network under some widely used assumptions, this paper proves that the level of service, represented by the volume-capacity (v/c) ratio, offered by a profit-maximizing private firm on a private toll road is independent of another competitor's choice of capacity and toll rate for another private toll road. The v/c ratio will be the same as the one provided by a centralized welfare-maximizing traffic authority. Moreover, the ratio remains the same even in a regulated market where the authority imposes a cap for the generalized travel cost on the private toll road.

Keywords: Private; toll; road; General; networks; Volume-capacity; ratio; Profit; maximization; and; social; welfare; maximization (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (29)

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