Pricing, Capacity and Long-Run Cost Functions for First-Best and Second-Best Network Problems
This paper considers the use of "long-run cost functions" for congested networks in solving second-best network problems, in which capacity and tolls are instruments. The authors derive analytical results both for general cost and demand functions and for specific functional forms, namely Bureau of Public Roads cost functions and constant-elasticity demand functions. The latter are also used in a numerical simulation model. The authors consider second-best cases where only a sub-set of links in a network is subject to tolling and/or capacity choice, and cases with and without a self-financing constraint imposed. The authors will demonstrate that, under certain assumptions, second-best long-run cost (or actually: generalized price) functions can be derived for most of the cases of interest, which can be used in an applied network model as a substitute for the conventional short-run user cost functions. Doing so reduces the dimensionality of the problem and should therefore be helpful in speeding up procedures for finding second-best optima.
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Availability:
- Find a library where document is available. Order URL: http://worldcat.org/issn/01912615
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Supplemental Notes:
- Abstract reprinted with permission from Elsevier.
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Authors:
- Verhoef, Erik T
- Koh, Andrew
- Shepherd, Simon
- Publication Date: 2010-8
Language
- English
Media Info
- Media Type: Print
- Features: Figures; References; Tables;
- Pagination: pp 870-885
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Serial:
- Transportation Research Part B: Methodological
- Volume: 44
- Issue Number: 7
- Publisher: Elsevier
- ISSN: 0191-2615
- Serial URL: http://www.sciencedirect.com/science/journal/01912615
Subject/Index Terms
- TRT Terms: Financial analysis; Highway capacity; Networks; Road pricing; Tolls; Traffic congestion; Travel demand
- Uncontrolled Terms: Cost function
- Subject Areas: Finance; Highways; Operations and Traffic Management; I72: Traffic and Transport Planning;
Filing Info
- Accession Number: 01162999
- Record Type: Publication
- Files: TRIS, ATRI
- Created Date: Jul 19 2010 11:34AM