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Bottleneck Congestion with Elastic Demand

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Author Info

  • Richard Arnott
  • Andre de Palma
  • Robin Lindsey

Abstract

This paper models congestable facilities subject to peak-load demand. It argues that a properly-specified model should explicitly treat the congestion technology and consumer's time-of-use decision. The standard model can be interpreted as a reduced form of such a model if the peak period is treated as a single interval, but not if it is divided into sub-intervals. The paper illustrates this, by extending Vickrey's model of bottleneck congestion, treating elastic demand and solving for optimal capacity under several pricing regimes.

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Bibliographic Info

Paper provided by Queen's University, Department of Economics in its series Working Papers with number 690.

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Length: 40 pages
Date of creation: 1987
Date of revision:
Handle: RePEc:qed:wpaper:690

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Cited by:
  1. Arnott, Richard & Kraus, Marvin, 1993. "The Ramsey problem for congestible facilities," Journal of Public Economics, Elsevier, vol. 50(3), pages 371-396, March.
  2. Yang, Hai & Hai-Jun, Huang, 1997. "Analysis of the time-varying pricing of a bottleneck with elastic demand using optimal control theory," Transportation Research Part B: Methodological, Elsevier, vol. 31(6), pages 425-440, November.

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