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The Ramsey Problem for Congestible Facilities

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  • Richard Arnott
  • Marvin Kraus

Abstract

In recent years, a new set of models drawing on Vickrey [1969] has been developed to analyze the economics of congestible facilities. These models are structural in that they derive the cost function from consumers' time-of-use decisions and the congestion technology. Standard models, in contrast, simply assume the general form of the cost function. We apply the new approach to analyze the Ramsey problem for a congestible facility, and show that the solution generally entails cost inefficiency. Standard models have failed to reveal this result because they treat the cost function as completely determined by technology.

Suggested Citation

  • Richard Arnott & Marvin Kraus, 1994. "The Ramsey Problem for Congestible Facilities," NBER Technical Working Papers 0084, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberte:0084
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    1. Richard Arnott & Andre de Palma & Robin Lindsey, 1987. "Bottleneck Congestion with Elastic Demand," Working Paper 690, Economics Department, Queen's University.
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    Cited by:

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    2. Geng, Kexin & Wang, Yacan & Cherchi, Elisabetta & Guarda, Pablo, 2023. "Commuter departure time choice behavior under congestion charge: Analysis based on cumulative prospect theory," Transportation Research Part A: Policy and Practice, Elsevier, vol. 168(C).
    3. Yang, Hai & Ye, Min & Tang, Wilson H. & Wong, S.C., 2005. "Regulating taxi services in the presence of congestion externality," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(1), pages 17-40, January.
    4. Kraus, Marvin & Yoshida, Yuichiro, 2002. "The Commuter's Time-of-Use Decision and Optimal Pricing and Service in Urban Mass Transit," Journal of Urban Economics, Elsevier, vol. 51(1), pages 170-195, January.
    5. Segendorff, Björn, 1995. "The Telecommunication Market: A Survey of Theory and Empirics," Working Paper Series 442, Research Institute of Industrial Economics.
    6. Takayama, Yuki & Kuwahara, Masao, 2016. "Scheduling preferences, parking competition, and bottleneck congestion: A model of trip timing and parking location choices by heterogeneous commuters," MPRA Paper 68938, University Library of Munich, Germany.
    7. Emanuela Randon, "undated". "Measuring Nash Equilibrium Consumption Externalities," Discussion Papers 04/08, Department of Economics, University of York.
    8. Richard Arnott & Marvin Kraus, 1995. "Self-Financing of Congestible Facilities in a Growing Economy," Boston College Working Papers in Economics 304., Boston College Department of Economics.
    9. Vincent van den Berg, "undated". "Self-financing roads under coarse tolling and heterogeneous preferences," Tinbergen Institute Discussion Papers 22-045/VIII, Tinbergen Institute.
    10. Boronico, Jess S. & Siegel, Philip H., 1998. "Capacity planning for toll roadways incorporating consumer wait time costs," Transportation Research Part A: Policy and Practice, Elsevier, vol. 32(4), pages 297-310, May.

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