Manipulable congestion tolls

The recent literature on congestion pricing with large agents contains a remarkable inconsistency: though agents are large enough to recognize self-imposed congestion and exert market power over prices, they do not take into account the impact of their own actions on the magnitude of congestion toll...

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Bibliographic Details
Published inJournal of urban economics Vol. 67; no. 3; pp. 315 - 321
Main Authors Brueckner, Jan K., Verhoef, Erik T.
Format Journal Article
LanguageEnglish
Published New York Elsevier Inc 01.05.2010
Elsevier
Elsevier BV
SeriesJournal of Urban Economics
Subjects
Airport
Congestion
Congestion Manipulation Pigouvian tax Airport
Economic theory
Manipulation
Pigouvian tax
Studies
Tolls
Traffic congestion
Pigouvian tax
H23
Congestion
Manipulation
L93
Airport
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Summary:The recent literature on congestion pricing with large agents contains a remarkable inconsistency: though agents are large enough to recognize self-imposed congestion and exert market power over prices, they do not take into account the impact of their own actions on the magnitude of congestion tolls. When large agents are confronted with tolls derived under this parametric assumption but understand the rule used to generate them, the toll system will no longer guide the market to the social optimum. To address this problem, the present paper derives alternate, manipulable toll rules, which are designed to achieve the social optimum when agents anticipate the full impact of their actions on toll liabilities.
ISSN:0094-1190
1095-9068
DOI:10.1016/j.jue.2009.10.003