Congestion costs in bottleneck equilibrium with stochastic capacity and demand
AbstractI 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 10040.
Date of creation: 2008
Date of revision:
Bottleneck model; Scheduling; Reliability; Congestion;
Find related papers by JEL classification:
- R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
This paper has been announced in the following NEP Reports:
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.:
- Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, American Economic Association, vol. 59(2), pages 251-60, May.
- Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1999.
"Information and time-of-usage decisions in the bottleneck model with stochastic capacity and demand,"
European Economic Review, Elsevier,
Elsevier, vol. 43(3), pages 525-548, March.
- R. Arnott & A. de Palma & R. Lindsey, 1997. "Information and time-of-usage decisions in the bottleneck model with stochastic capacity and demand," THEMA Working Papers 97-13, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- 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, Boston College Department of Economics 355., Boston College Department of Economics.
- Daniel, Joseph I, 1995. "Congestion Pricing and Capacity of Large Hub Airports: A Bottleneck Model with Stochastic Queues," Econometrica, Econometric Society, Econometric Society, vol. 63(2), pages 327-70, March.
- Small, Kenneth A, 1982. "The Scheduling of Consumer Activities: Work Trips," American Economic Review, American Economic Association, American Economic Association, vol. 72(3), pages 467-79, June.
- Fosgerau, Mogens & Karlström, Anders, 2007.
"The value of reliability,"
5733, University Library of Munich, Germany.
- Fosgerau, Mogens & Karlström, Anders, 2010. "The value of reliability," Transportation Research Part B: Methodological, Elsevier, Elsevier, vol. 44(1), pages 38-49, January.
- 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.
- 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, American Economic Association, vol. 83(1), pages 161-79, March.
- Fosgerau, Mogens, 2010.
"On the relation between the mean and variance of delay in dynamic queues with random capacity and demand,"
Journal of Economic Dynamics and Control, Elsevier,
Elsevier, vol. 34(4), pages 598-603, April.
- 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.
- repec:dgr:uvatin:2010073 is not listed on IDEAS
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.