Profit Maximising Transit in Combination with a Congestion Charge: An Inter-Modal Equilibrium Model

This chapter develops an inter-modal equilibrium model that links an urban road network subject to a congestion charge to a parallel urban transit market, with a view to finding the optimum congestion charge that are consistent with the commercial decisions of transit operators. A congestion charge is set to maximize social surplus. Travel behavior is assumed to conform to elastic-demand user equilibrium traffic assignment. The transit market is assumed to be either a profit-maximizing monopoly or a profit maximizing duopoly competing non-cooperatively. The operator(s) set the fares to maximize the profits and the supply of transit services is determined by the associated demand. The problem has been formulated as a bi-level program with the determination of the congestion charge on the upper level and the setting of transit fares on the lower level. In the case of non-cooperating operators, the Bertrand-Nash equilibrium fares are sought. The results of the model are analyzed for an example reflecting the Edinburgh transit market. This reveals the importance of competition in the market for distributing the social surplus between providers and travelers.


  • English

Media Info

  • Media Type: Print
  • Features: Figures; References;
  • Pagination: pp 23-38
  • Monograph Title: Road Congestion Pricing in Europe. Implications for the United States

Subject/Index Terms

Filing Info

  • Accession Number: 01109784
  • Record Type: Publication
  • ISBN: 9781847203809
  • Files: TRIS
  • Created Date: Aug 25 2008 12:26PM