Welfare effects of road pricing and traffic information under alternative ownership regimes
This paper models strategic interactions between a road supplier, a provider of traffic information, and road users, with stochastic travel times. Using a game-theoretical analysis of suppliers’ pricing strategies, we assess the social welfare effects of traffic information under various ownership regimes. The results show that the distortive welfare effect of monopolistic information pricing appears relatively small. Collusion of the road operator and information provider yields higher social welfare than independent pricing by two firms. The intuition behind this result resembles that behind the welfare effects of double marginalization, but is not exactly the same, as traffic information is not strictly complementary to road use.
Volume (Year): 46 (2012)
Issue (Month): 8 ()
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional|
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.:
- Emmerink, Richard H M, et al, 1998. "Information Effects in Transport with Stochastic Capacity and Uncertainty Costs," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(1), pages 89-110, February.
- Koster, Paul & Kroes, Eric & Verhoef, Erik, 2011.
"Travel time variability and airport accessibility,"
Transportation Research Part B: Methodological,
Elsevier, vol. 45(10), pages 1545-1559.
- Paul Koster & Eric Kroes & Erik T. Verhoef, 2010. "Travel Time Variability and Airport Accessibility," Tinbergen Institute Discussion Papers 10-061/3, Tinbergen Institute.
- Kihlstrom, Richard E, 1974. "A Bayesian Model of Demand for Information About Product Quality," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 15(1), pages 99-118, February.
- Enrique Fernández L., J. & de Cea Ch, Joaquín & Germán Valverde, G., 2009. "Effect of advanced traveler information systems and road pricing in a network with non-recurrent congestion," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(5), pages 481-499, June.
- Joseph E. Stiglitz, 2000. "The Contributions of the Economics of Information to Twentieth Century Economics," The Quarterly Journal of Economics, Oxford University Press, vol. 115(4), pages 1441-1478.
- Hai Yang, 1999. "Evaluating the benefits of a combined route guidance and road pricing system in a traffic network with recurrent congestion," Transportation, Springer, vol. 26(3), pages 299-322, August.
- Alessandro Lizzeri, 1999. "Information Revelation and Certification Intermediaries," RAND Journal of Economics, The RAND Corporation, vol. 30(2), pages 214-231, Summer.
- Kehoe, Michael R, 1996. "Quality Uncertainty and Price in Monopoly Markets," Journal of Industrial Economics, Wiley Blackwell, vol. 44(1), pages 25-32, March.
- Steven Salop, 1977. "The Noisy Monopolist: Imperfect Information, Price Dispersion and Price Discrimination," Review of Economic Studies, Oxford University Press, vol. 44(3), pages 393-406.
- Zhang, Rong & Verhoef, Erik T., 2006. "A monopolistic market for advanced traveller information systems and road use efficiency," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(5), pages 424-443, June.
- Rong Zhang & Erik T. Verhoef, 2004. "A Monopolistic Market for Advanced Traveller Information Systems and Road Use Efficiency," Tinbergen Institute Discussion Papers 04-014/3, Tinbergen Institute.
- Robin Lindsey & Andre de Palma, 1998. "Information and Usage of Congestible Facilities Under Different Pricing Regimes," Canadian Journal of Economics, Canadian Economics Association, vol. 31(3), pages 666-692, August.
- Fosgerau, Mogens & Karlström, Anders, 2010. "The value of reliability," Transportation Research Part B: Methodological, Elsevier, vol. 44(1), pages 38-49, January.
- Fosgerau, Mogens & Karlström, Anders, 2007. "The value of reliability," MPRA Paper 5733, University Library of Munich, Germany.
- Kenneth A. Small & Clifford Winston & Jia Yan, 2005. "Uncovering the Distribution of Motorists' Preferences for Travel Time and Reliability," Econometrica, Econometric Society, vol. 73(4), pages 1367-1382, 07.
- Gerard de Jong & Hugh Gunn, 2001. "Recent Evidence on Car Cost and Time Elasticities of Travel Demand in Europe," Journal of Transport Economics and Policy, University of Bath, vol. 35(2), pages 137-160, May.
- Verhoef, Erik T. & Emmerink, Richard H. M. & Nijkamp, Peter & Rietveld, Piet, 1996. "Information provision, flat and fine congestion tolling and the efficiency of road usage," Regional Science and Urban Economics, Elsevier, vol. 26(5), pages 505-529, August.
- George J. Stigler, 1961. "The Economics of Information," Journal of Political Economy, University of Chicago Press, vol. 69, pages 213-213. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:46:y:2012:i:8:p:1304-1317. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If references are entirely missing, you can add them using this form.