CONGESTION TOLLS UNDER MONOPOLY

IT HAS BEEN SHOWN THAT A MONOPOLIST'S OUTPUT MAY BE EITHER LARGER OR SMALLER THAN THE PARETO OPTIMAL LEVEL IF HIS PRODUCTION PROCESS INVOLVES EXTERNAL COSTS. THIS CONCLUSION IS EXPLORED WITH REGARD TO EXTERNALITIES IN CONSUMPTION. CONGESTION IS ANALYZED BY CONSIDERING A MODEL OF COMMUTING VIA ALTERNATIVE MODES: HIGHWAY AND RAILROAD. PARETO OPTIMALITY AND PROFIT MAXIMIZATION GENERALLY IMPLY DIFFERENT TOLLS IF COMMUTER HAVE DIFFERENT VALUES OF TIME, AND A MONOPOLIST'S TOLL MAY ADMIT A TRAFFIC FLOW LARGER THAN THE PARETO OPTIMAL RATE. A MODEL IS CONSIDERED IN WHICH BOTH TRAVEL MODES ARE SUBJECT TO CONGESTION DELAYS. /AUTHOR/

• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/00028282
• Supplemental Notes:
  • Vol 61, No 5, PP 873-882
• Authors:
  • Edelson, N M
• Publication Date: 0

Media Info

• Serial:
  • American Economic Review
  • Publisher: American Economic Association
  • ISSN: 0002-8282

Subject/Index Terms

• TRT Terms: Costs; Highways; Mathematical models; Monopoly; Railroads; Tolls; Traffic congestion
• Uncontrolled Terms: Congestion; Models; Pareto optimum
• Subject Areas: Finance; Highways; Operations and Traffic Management; Railroads;

Filing Info

• Accession Number: 00227338
• Record Type: Publication
• Files: TRIS
• Created Date: Mar 7 1972 12:00AM