Nonlinear pricing on private roads with congestion and toll collection costs

Nonlinear pricing (a form of second-degree price discrimination) is widely used in transportation and other industries but it has been largely overlooked in the road-pricing literature. This paper explores the incentives for a profit-maximizing toll-road operator to adopt some simple nonlinear pricing schemes when there is congestion and collecting tolls is costly. Users are assumed to differ in their demands to use the road. Regardless of the severity of congestion, an access fee is always profitable to implement either as part of a two-part tariff or as an alternative to paying a toll. Use of access fees for profit maximization can increase or decrease welfare relative to usage-only pricing for profit maximization. Hence a ban on access fees could reduce welfare.

• Record URL:
  http://www.sciencedirect.com/science/article/B6V99-50867F0-2/2/83ae7b6004e926dda01811126be03741
• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/01912615
• Supplemental Notes:
  • Abstract reprinted with permission from Elsevier.
• Authors:
  • Wang, Judith Y T
  • Lindsey, Robin
  • Yang, Hai
• Publication Date: 2011-1

Language

• English

Media Info

• Media Type: Print
• Features: Appendices; Bibliography; Figures; Glossary; References; Tables;
• Pagination: pp 9-40
• Serial:
  • Transportation Research Part B: Methodological
  • Volume: 45
  • Issue Number: 1
  • Publisher: Elsevier
  • ISSN: 0191-2615
  • Serial URL: http://www.sciencedirect.com/science/journal/01912615

Subject/Index Terms

• TRT Terms: Congestion pricing; Costs; Private roads; Profitability; Profits; Road pricing; Toll collection; Tolls; Traffic congestion; Travel demand
• Uncontrolled Terms: Access fees; Nonlinearity; Profit maximization
• Subject Areas: Finance; Highways;

Filing Info

• Accession Number: 01324014
• Record Type: Publication
• Files: TRIS, ATRI
• Created Date: Dec 29 2010 11:34AM