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When Are Anonymous Congestion Charges Consistent with Marginal Cost Pricing?

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Author Info
Richard Arnott
Marvin Kraus

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Abstract

There are constraints on pricing congestible facilities. First, if heterogeneous users are observationally indistinguishable, then congestion charges must be anonymous. Second, the time variation of congestion charges may be constrained. Do these constraints undermine the feasibility of marginal cost pricing, and hence the applicability of the first-best theory of congestible facilities? We show that if heterogeneous users behave identically when using the congestible facility and if the time variation of congestion charges is unconstrained, then marginal cost pricing is feasible with anonymous congestion charges. If, however, the time variation of congestion charges is constrained, optimal pricing with anonymous congestion charges entails Ramsey pricing.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Technical Working Papers with number 0154.

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Date of creation: Apr 1994
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Handle: RePEc:nbr:nberte:0154

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H2 - Public Economics - - Taxation, Subsidies, and Revenue

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Dorfman, Robert, 1969. "An Economic Interpretation of Optimal Control Theory," American Economic Review, American Economic Association, vol. 59(5), pages 817-31, December. [Downloadable!] (restricted)
  2. Mohring, Herbert, 1970. "The Peak Load Problem with Increasing Returns and Pricing Constraints," American Economic Review, American Economic Association, vol. 60(4), pages 693-705, September. [Downloadable!] (restricted)
  3. Richard Arnott & Marvin Kraus, 1993. "Financing Capacity On The Bottleneck Model," Boston College Working Papers in Economics 222, Boston College Department of Economics.
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  4. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1993. "A Structural Model of Peak-Period Congestion: A Traffic Bottleneck with Elastic Demand," American Economic Review, American Economic Association, vol. 83(1), pages 161-79, March. [Downloadable!] (restricted)
  5. Henderson, J. Vernon, 1981. "The economics of staggered work hours," Journal of Urban Economics, Elsevier, vol. 9(3), pages 349-364, May. [Downloadable!] (restricted)
  6. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-60, May. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Parry, Ian W.H., 2008. "Pricing Urban Congestion," Discussion Papers dp-08-35, Resources For the Future. [Downloadable!]
  2. Proost Stef & Van der Loo Saskia & Andre de Palma & Lindsey Robin, 2005. "A cost-benefit analysis of tunnel investment and tolling alternatives in Antwerp," Energy, Transport and Environment Working Papers Series ete0507, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment. [Downloadable!]
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  3. Richard Arnott & Elizaveta Shevyakhova, 2007. "Tenancy Rent Control and Credible Commitment in Maintenance," Boston College Working Papers in Economics 661, Boston College Department of Economics. [Downloadable!]
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  4. Wuping Xin & David Levinson, 2006. "Stochastic congestion and pricing model with endogenous departure time selection and heterogeneous travelers," Working Papers 000029, University of Minnesota: Nexus Research Group. [Downloadable!]
  5. Jan Rouwendal, 2002. "Speed Choice, Car Following Theory and Congestion Tolling," Tinbergen Institute Discussion Papers 02-102/3, Tinbergen Institute. [Downloadable!]
  6. Richard Arnott, 2007. "Congestion Tolling with Agglomeration Externalities," Boston College Working Papers in Economics 660, Boston College Department of Economics. [Downloadable!]
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  7. C. Robin Lindsey & Erik T. Verhoef, 2000. "Traffic Congestion and Congestion Pricing," Tinbergen Institute Discussion Papers 00-101/3, Tinbergen Institute. [Downloadable!]
  8. Erik T. Verhoef & Herbert Mohring, 2007. "Self-Financing Roads," Tinbergen Institute Discussion Papers 07-068/3, Tinbergen Institute. [Downloadable!]
  9. Richard Arnott & John Rowse, 2007. "Downtown Parking in Auto City," Boston College Working Papers in Economics 665, Boston College Department of Economics. [Downloadable!]
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