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Network Externalities and Incomplete Information in Urban Transport


  • Christelle Viauroux



We develop a structural microeconomic model of urban travel demand. This model incorporates aversion to congestion by individuals and determines the degree of congestion endogenously. Each individual?s optimal travel decision depends on the travel decisions of others, such that in Nash equilibrium all individuals simultaneously decide on the number of trips.The model is estimated for optimal modes of transportation and optimal fares. It reveals the relevance of incomplete information in transportation markets. We also estimate a measure of the individuals' willingness to pay for gaining time in traffic.

Suggested Citation

  • Christelle Viauroux, 2004. "Network Externalities and Incomplete Information in Urban Transport," University of Cincinnati, Economics Working Papers Series 2004-03, University of Cincinnati, Department of Economics.
  • Handle: RePEc:cin:ucecwp:2004-03

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    5. Jorion, Philippe & Sweeney, Richard J., 1996. "Mean reversion in real exchange rates: evidence and implications for forecasting," Journal of International Money and Finance, Elsevier, vol. 15(4), pages 535-550, August.
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    7. Hegwood, Natalie D & Papell, David H, 1998. "Quasi Purchasing Power Parity," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 3(4), pages 279-289, October.
    8. MacDonald, Ronald, 1996. "Panel unit root tests and real exchange rates," Economics Letters, Elsevier, vol. 50(1), pages 7-11, January.
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