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Congestion costs in bottleneck equilibrium with stochastic capacity and demand

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Author Info
Fosgerau, Mogens

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Abstract

I analyse congestion costs in the Vickrey bottleneck model of a congestible facility with a peak load in demand. The shape of the peak is endogenous, being the sum of individual scheduling decisions. Capacity and demand are random, which introduces uncertainty into the individual scheduling choices. These are essential features of actual peak loads. Based on work by Arnott, de Palma and Lindsey, I derive the expected marginal and total congestion costs and compare to the case with fixed capacity and demand. Using stylised values for scheduling costs relative to the value of time, I find that randomness of capacity and demand increases congestions cost by up to 50 percent relative to the deterministic case. The bound is general for any distribution of random capacity and demand.

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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 10040.

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Date of creation: 2008
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Handle: RePEc:pra:mprapa:10040

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Related research
Keywords: Bottleneck model; Scheduling; Reliability; Congestion;

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Find related papers by JEL classification:
R40 - Urban, Rural, and Regional Economics - - Transportation Systems - - - General

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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. Fosgerau, Mogens & Karlström, Anders, 2007. "The value of reliability," MPRA Paper 5733, University Library of Munich, Germany. [Downloadable!]
  2. Anas, Alex & Rhee, Hyok-Joo, 2007. "When are urban growth boundaries not second-best policies to congestion tolls?," Journal of Urban Economics, Elsevier, vol. 61(2), pages 263-286, March. [Downloadable!] (restricted)
  3. 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)
  4. Richard Arnott & Andre de Palma & Robin Lindsey, 1996. "Information and Time-of-Usage Decisions in the Bottleneck Model with Stochastic Capacity and Demand," Boston College Working Papers in Economics 355., Boston College Department of Economics.
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  5. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-60, May. [Downloadable!] (restricted)
  6. Small, Kenneth A, 1982. "The Scheduling of Consumer Activities: Work Trips," American Economic Review, American Economic Association, vol. 72(3), pages 467-79, June. [Downloadable!] (restricted)
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Cited by:
(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. Fosgerau, Mogens & Jensen, Henning F., 2008. "A note on the existence of Nash equilibrium in the stochastic bottleneck model," MPRA Paper 12012, University Library of Munich, Germany. [Downloadable!]
  2. Fosgerau, Mogens, 2008. "On the relation between the mean and variance of delay in dynamic queues with random capacity and demand," MPRA Paper 11994, University Library of Munich, Germany. [Downloadable!]
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