Incentive-compatible public transportation fares with random inspection

In\'acio B\'o and Chiu Yu Ko

Papers from arXiv.org

Abstract: We consider the problem of designing prices for public transport where payment enforcing is done through random inspection of passengers' tickets as opposed to physically blocking their access. Passengers are fully strategic such that they may choose different routes or buy partial tickets in their optimizing decision. We derive expressions for the prices that make every passenger choose to buy the full ticket. Using travel and pricing data from the Washington DC metro, we show that a switch to a random inspection method for ticketing while keeping current prices could lead to more than 59% of revenue loss due to fare evasion, while adjusting prices to take incentives into consideration would reduce that loss to less than 20%, without any increase in prices.

Date: 2022-05
New Economics Papers: this item is included in nep-tre and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2205.11858 Latest version (application/pdf)

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:arx:papers:2205.11858

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().