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A New Tradable Credit Scheme for the Morning Commute Problem

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  • Yu Nie

Abstract

This paper seeks to apply a new tradable credit scheme in the morning commute problem. When implementing such a scheme, the congestion management authority first delineates a peak-time window and then requires all traveler who pass the bottleneck within that window to either pay certain units of mobility credits, or a peak time toll (which is comparably more expensive). The authority also rewards credits to anyone who passes the bottleneck during the designated off-peak time window. An artificial market is created so that the travelers may trade these credits with each other. Our analyses, which are based on the Vickrey’s bottleneck model managed by step tolls, indicate that the proposed scheme has several notable advantages. First, the market allows those who value travel time savings less to be directly compensated by selling credits to those who value them more. This mechanism promises simpler and fairer distribution of the benefits from congestion relief. Second, as no transfer of wealth takes places between travelers and the authority, the payment made to acquire credits is less likely to be perceived as a tax. Third, the rewarding-charging mechanism avoids the top-down allocation of credits in existing tradable credit schemes. In the proposed scheme, credits are only rewarded to those who contribute to congestion relief. Last but not least, the proposed scheme is easy to understand and simple to implement. In particular, we show that the best choice of the rewarding-charging ratio is 1, i.e., each peak-time user will be charged one credit and each off-peak user will be awarded one credit. Copyright Springer Science+Business Media New York 2015

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  • Yu Nie, 2015. "A New Tradable Credit Scheme for the Morning Commute Problem," Networks and Spatial Economics, Springer, vol. 15(3), pages 719-741, September.
    • Handle: RePEc:kap:netspa:v:15:y:2015:i:3:p:719-741
    DOI: 10.1007/s11067-013-9192-8
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    Cited by:

    1. Zhang, Fang & Lu, Jian & Hu, Xiaojian, 2021. "Tradable credit scheme design with transaction cost and equity constraint," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).
    2. Ren-Yong Guo & Hai-Jun Huang & Hai Yang, 2019. "Tradable Credit Scheme for Control of Evolutionary Traffic Flows to System Optimum: Model and its Convergence," Networks and Spatial Economics, Springer, vol. 19(3), pages 833-868, September.
    3. Louis Balzer & Ludovic Leclercq, 2021. "Modal equilibrium of a tradable credit scheme with a trip-based MFD and logit-based decision-making," Papers 2112.07277, arXiv.org, revised Apr 2022.
    4. Xu, Da & Guo, Xiaolei & Zhang, Guoqing, 2019. "Constrained optimization for bottleneck coarse tolling," Transportation Research Part B: Methodological, Elsevier, vol. 128(C), pages 1-22.
    5. Fan, Wenbo & Xiao, Feng & Nie, Yu (Macro), 2022. "Managing bottleneck congestion with tradable credits under asymmetric transaction cost," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 158(C).
    6. Lahlou, Salem & Wynter, Laura, 2017. "A Nash equilibrium formulation of a tradable credits scheme for incentivizing transport choices: From next-generation public transport mode choice to HOT lanes," Transportation Research Part B: Methodological, Elsevier, vol. 101(C), pages 185-212.
    7. Xia Yang & Xuegang Jeff Ban & Rui Ma, 2017. "Mixed Equilibria with Common Constraints on Transportation Networks," Networks and Spatial Economics, Springer, vol. 17(2), pages 547-579, June.
    8. Ravi Seshadri & André de Palma & Moshe Ben-Akiva, 2021. "Congestion Tolling−Dollars versus Tokens: Within-day Dynamics," THEMA Working Papers 2021-12, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    9. Wei Wu & Wei Liu & Fangni Zhang & Vinayak Dixit, 2021. "A New Flexible Parking Reservation Scheme for the Morning Commute under Limited Parking Supplies," Networks and Spatial Economics, Springer, vol. 21(3), pages 513-545, September.
    10. Siyu Chen & Ravi Seshadri & Carlos Lima Azevedo & Arun P. Akkinepally & Renming Liu & Andrea Araldo & Yu Jiang & Moshe E. Ben-Akiva, 2021. "Market Design for Tradable Mobility Credits," Papers 2101.00669, arXiv.org, revised Sep 2022.
    11. Jonathan D. Hall, 2017. "Improving the fit of structural models of congestion," Working Papers tecipa-590, University of Toronto, Department of Economics.
    12. Fei Han & Jian Wang & Lingli Huang & Yan Li & Liu He, 2023. "Modeling Impacts of Implementation Policies of Tradable Credit Schemes on Traffic Congestion in the Context of Traveler’s Cognitive Illusion," Sustainability, MDPI, vol. 15(15), pages 1-18, July.
    13. Li, Zhi-Chun & Huang, Hai-Jun & Yang, Hai, 2020. "Fifty years of the bottleneck model: A bibliometric review and future research directions," Transportation Research Part B: Methodological, Elsevier, vol. 139(C), pages 311-342.
    14. Candia, Diego & Verhoef, Erik T., 2022. "Tradable mobility permits in a monocentric city with pre-existing labor taxation: A general equilibrium perspective," Transportation Research Part B: Methodological, Elsevier, vol. 163(C), pages 145-165.
    15. Ghafelebashi, Ali & Razaviyayn, Meisam & Dessouky, Maged, 2021. "Congestion Reduction via Personalized Incentives," Institute of Transportation Studies, Working Paper Series qt5b82168n, Institute of Transportation Studies, UC Davis.
    16. Nie, Yu (Marco), 2017. "On the potential remedies for license plate rationing," Economics of Transportation, Elsevier, vol. 9(C), pages 37-50.

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