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Bounding the efficiency of road pricing


  • Yang, Hai
  • Xu, Wei
  • Heydecker, Benjamin


This paper deals with the following question associated with congestion pricing in a general network with either fixed or elastic travel demand: what is the maximum efficiency loss of a general second-best pricing scheme due to inexact marginal-cost pricing in comparison with the first-best pricing or system optimum case? A formal answer to this question is provided by establishing an inefficiency bound associated with a given road pricing scheme. An application of the methods is provided for the practical trial-and-error implementation of marginal-cost pricing with unknown demand functions.

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  • Yang, Hai & Xu, Wei & Heydecker, Benjamin, 2010. "Bounding the efficiency of road pricing," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 46(1), pages 90-108, January.
  • Handle: RePEc:eee:transe:v:46:y:2010:i:1:p:90-108

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    Cited by:

    1. Liu, Tian-Liang & Chen, Jian & Huang, Hai-Jun, 2011. "Existence and efficiency of oligopoly equilibrium under toll and capacity competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(6), pages 908-919.
    2. repec:kap:transp:v:44:y:2017:i:4:d:10.1007_s11116-015-9674-2 is not listed on IDEAS
    3. O'Hare, Steven J. & Connors, Richard D. & Watling, David P., 2016. "Mechanisms that govern how the Price of Anarchy varies with travel demand," Transportation Research Part B: Methodological, Elsevier, vol. 84(C), pages 55-80.
    4. Feng, Zengzhe & Gao, Ziyou & Sun, Huijun, 2014. "Bounding the inefficiency of atomic splittable selfish traffic equilibria with elastic demands," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 63(C), pages 31-43.
    5. Dieplinger, Maria & Fürst, Elmar, 2014. "The acceptability of road pricing: Evidence from two studies in Vienna and four other European cities," Transport Policy, Elsevier, vol. 36(C), pages 10-18.
    6. Xin Lin & Chris M. J. Tampère & Francesco Viti & Ben Immers, 2016. "The Cost of Environmental Constraints in Traffic Networks: Assessing the Loss of Optimality," Networks and Spatial Economics, Springer, vol. 16(1), pages 349-369, March.


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