Welfare effects of road pricing and traffic information under alternative ownership regimes
AbstractThis paper models strategic interactions between a road supplier, a provider of traffic information, and road users, with stochastic travel times. Using a game-theoretical analysis of suppliers’ pricing strategies, we assess the social welfare effects of traffic information under various ownership regimes. The results show that the distortive welfare effect of monopolistic information pricing appears relatively small. Collusion of the road operator and information provider yields higher social welfare than independent pricing by two firms. The intuition behind this result resembles that behind the welfare effects of double marginalization, but is not exactly the same, as traffic information is not strictly complementary to road use.
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Bibliographic InfoArticle provided by Elsevier in its journal Transportation Research Part A: Policy and Practice.
Volume (Year): 46 (2012)
Issue (Month): 8 ()
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Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description
Other versions of this item:
- Sergejs Gubins & Erik T. Verhoef & Thomas de Graaff, 2010. "Welfare Effects of Road Pricing and Traffic Information under Alternative Ownership Regimes," Tinbergen Institute Discussion Papers 10-091/3, Tinbergen Institute.
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
- R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Systems - - - Transportation: Demand, Supply, and Congestion
- R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Systems - - - Government Pricing and Policy
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