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Economics of a Bottleneck

Author

Listed:
  • Richard Arnott
  • Andre de Palma
  • Robin Lindsey

Abstract

This paper is the first in a series of papers which examine the economics of congestable facilities with peak-load demand, provides a thorough analysis of the simplest bottleneck model: A fixed number of individuals, one per car, must travel from home to work. Between home and work is a bottleneck of given capacity. The costs of travel include queuing time and schedule delay. Equilibrium with no toll, a coarse toll, and a fine toll are compared and optimal bottleneck capacity computed for each case.

Suggested Citation

  • Richard Arnott & Andre de Palma & Robin Lindsey, 1985. "Economics of a Bottleneck," Working Paper 636, Economics Department, Queen's University.
    • Handle: RePEc:qed:wpaper:636
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    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L68 - Industrial Organization - - Industry Studies: Manufacturing - - - Appliances; Furniture; Other Consumer Durables

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