The independence of volume-capacity ratio of private toll roads in general networks
In a general traffic network under some widely used assumptions, this paper proves that the level of service, represented by the volume-capacity (v/c) ratio, offered by a profit-maximizing private firm on a private toll road is independent of another competitor's choice of capacity and toll rate for another private toll road. The v/c ratio will be the same as the one provided by a centralized welfare-maximizing traffic authority. Moreover, the ratio remains the same even in a regulated market where the authority imposes a cap for the generalized travel cost on the private toll road.
Volume (Year): 45 (2011)
Issue (Month): 1 (January)
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References listed on IDEAS
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- Barry Ubbels & Erik Verhoef, 2004.
"Auctioning Concessions for Private Roads,"
Tinbergen Institute Discussion Papers
04-008/3, Tinbergen Institute.
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- Jyh-Fa Tsai & Chih-Peng Chu, 2003. "The analysis of regulation on private highway investment under a build-operate-transfer scheme," Transportation, Springer, vol. 30(2), pages 221-243, May.
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