Managing bottleneck congestion with tradable credits under asymmetric transaction cost

Wenbo Fan, Feng Xiao and Nie, Yu (Macro)

Transportation Research Part E: Logistics and Transportation Review, 2022, vol. 158, issue C

Abstract: Tradable credit schemes (TCS) have been promoted as an alternative to congestion pricing in recent years. Most existing TCS studies assume a frictionless trading market that incurs zero transaction cost. In this study, we propose to examine how transaction cost, taking the form of brokerage fee charged by a TCS operator for the deal-matching service, impacts the performance of TCS in the context of morning commute. Unlike the existing studies, the brokerage fee is assumed to be proportional to the transaction value and asymmetrically split between buyers and sellers. Using the bottleneck model, the optimal TCS design is first obtained for the case of homogeneous commuters and asymmetric transaction cost. We also derive the conditions that ensure Pareto-improving for commuters and financial self-sufficiency for the operator. The latter means the brokerage fee can cover the operator’s cost. These analytical results are then extended to cases considering user heterogeneity—which allows commuters to have different values of times (VOT) and desired arrival times at the workplace—and coarse charging design. Among other things, we find that an asymmetric fee structure is better for system performance when buyers bear a higher share of the transaction cost.

Keywords: Tradable credits scheme; Asymmetric transaction cost; Bottleneck model; Departure time choices; System optimum (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1366554521003550
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:transe:v:158:y:2022:i:c:s1366554521003550

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/bibliographic
http://www.elsevier. ... 600244/bibliographic

DOI: 10.1016/j.tre.2021.102600

Access Statistics for this article

Transportation Research Part E: Logistics and Transportation Review is currently edited by W. Talley

More articles in Transportation Research Part E: Logistics and Transportation Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().