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Information and Usage of Congestible Facilities Under Different Pricing Regimes

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Author Info
Robin Lindsey
Andre de Palma

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Abstract

Uncertainty about usage conditions is common in many congestible facilities. In this paper, the authors consider the effects of providing information to prospective users under three regimes: free access, nonresponsive congestion tolling, and responsive tolling based on current information. With either free access or nonresponsive tolling better information can induce changes in usage that reduce expected social surplus. But responsive tolling assures that better information is welfare improving. The joint welfare gains from providing information and tolling can be larger or smaller than the sum of the gains from implementing each independently. Superadditivity is likely to obtain when demand is price elastic.

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File URL: http://economics.ca/cgi/xms?jab=v31n3/08.pdf
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Publisher Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 31 (1998)
Issue (Month): 3 (August)
Pages: 666-692
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Handle: RePEc:cje:issued:v:31:y:1998:i:3:p:666-692

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  1. C. Robin Lindsey & Erik T. Verhoef, 2000. "Traffic Congestion and Congestion Pricing," Tinbergen Institute Discussion Papers 00-101/3, Tinbergen Institute. [Downloadable!]
  2. Muhammad Sabir & Jos van Ommeren & Mark Koetse & Piet Rietveld, 2008. "Welfare Effects of Adverse Weather through Speed Changes in Car Commuting Trips," Tinbergen Institute Discussion Papers 08-087/3, Tinbergen Institute. [Downloadable!]
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