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How a fast lane may replace a congestion toll


  • Fosgerau, Mogens


This paper considers a congested bottleneck. A fast lane reserves a more than proportional share of capacity to a designated group of travelers. Travelers are otherwise identical and other travelers can use the reserved capacity when it would otherwise be idle. The paper shows that such a fast lane is always Pareto improving under Nash equilibrium in arrival times at the bottleneck and inelastic demand. It can replicate the arrival schedule and queueing outcomes of a toll that optimally charges a constant toll during part of the demand peak. Within some bounds, the fast lane scheme is still welfare improving when demand is elastic.

Suggested Citation

  • Fosgerau, Mogens, 2011. "How a fast lane may replace a congestion toll," MPRA Paper 42271, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:42271

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    References listed on IDEAS

    1. Laih, Chen-Hsiu, 1994. "Queueing at a bottleneck with single- and multi-step tolls," Transportation Research Part A: Policy and Practice, Elsevier, vol. 28(3), pages 197-208, May.
    2. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1993. "A Structural Model of Peak-Period Congestion: A Traffic Bottleneck with Elastic Demand," American Economic Review, American Economic Association, vol. 83(1), pages 161-179, March.
    3. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1990. "Economics of a bottleneck," Journal of Urban Economics, Elsevier, vol. 27(1), pages 111-130, January.
    4. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-260, May.
    5. de Palma, André & Fosgerau, Mogens, 2013. "Random queues and risk averse users," European Journal of Operational Research, Elsevier, vol. 230(2), pages 313-320.
    6. Shen, Wei & Zhang, H.M., 2010. "Pareto-improving ramp metering strategies for reducing congestion in the morning commute," Transportation Research Part A: Policy and Practice, Elsevier, vol. 44(9), pages 676-696, November.
    7. Chen-Hsiu Laih, 2004. "Effects of the optimal step toll scheme on equilibrium commuter behaviour," Applied Economics, Taylor & Francis Journals, vol. 36(1), pages 59-81.
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    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. Dealing with congestion: fast lane or toll booth?
      by Economic Logician in Economic Logic on 2012-12-03 21:11:00


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. van den Berg, Vincent A.C., 2012. "Step-tolling with price-sensitive demand: Why more steps in the toll make the consumer better off," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(10), pages 1608-1622.
    2. Fosgerau, Mogens & Small, Kenneth A., 2013. "Hypercongestion in downtown metropolis," Journal of Urban Economics, Elsevier, vol. 76(C), pages 122-134.
    3. Knockaert, Jasper & Verhoef, Erik T. & Rouwendal, Jan, 2016. "Bottleneck congestion: Differentiating the coarse charge," Transportation Research Part B: Methodological, Elsevier, vol. 83(C), pages 59-73.
    4. Paraskevopoulos, Dimitris C. & Gürel, Sinan & Bektaş, Tolga, 2016. "The congested multicommodity network design problem," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 85(C), pages 166-187.
    5. repec:eee:transb:v:99:y:2017:i:c:p:205-227 is not listed on IDEAS
    6. C. Robin Lindsey & Vincent A.C. van den Berg & Erik T. Verhoef, 2010. "Step by Step: Revisiting Step Tolling in the Bottleneck Model," Tinbergen Institute Discussion Papers 10-118/3, Tinbergen Institute, revised 02 Aug 2012.
    7. Fosgerau, Mogens & de Palma, André, 2013. "The dynamics of urban traffic congestion and the price of parking," Journal of Public Economics, Elsevier, vol. 105(C), pages 106-115.
    8. Robin Lindsey, C. & van den Berg, Vincent A.C. & Verhoef, Erik T., 2012. "Step tolling with bottleneck queuing congestion," Journal of Urban Economics, Elsevier, vol. 72(1), pages 46-59.
    9. van den Berg, Vincent A.C., 2014. "Coarse tolling with heterogeneous preferences," Transportation Research Part B: Methodological, Elsevier, vol. 64(C), pages 1-23.
    10. Berg, V.A.C. van den, 2012. "Step tolling with price sensitive demand: Why more steps in the toll makes the consumer better off," Serie Research Memoranda 0003, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.

    More about this item


    Congestion; Tolling; Bottleneck; Scheduling; Fast lane;

    JEL classification:

    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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