Manipulable Congestion Tolls

Jan K. Brueckner, Erik T. Verhoef

Research output: Working paperProfessional

Abstract

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.
Original languageEnglish
Place of PublicationAmsterdam
PublisherTinbergen Instituut
Publication statusPublished - 2009

Publication series

NameDiscussion paper TI
No.09-009/3

Fingerprint

Congestion
Social optimum
Liability
Market power
Inconsistency
Congestion pricing

Cite this

Brueckner, J. K., & Verhoef, E. T. (2009). Manipulable Congestion Tolls. (Discussion paper TI; No. 09-009/3). Amsterdam: Tinbergen Instituut.
Brueckner, Jan K. ; Verhoef, Erik T. / Manipulable Congestion Tolls. Amsterdam : Tinbergen Instituut, 2009. (Discussion paper TI; 09-009/3).
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Brueckner, JK & Verhoef, ET 2009 'Manipulable Congestion Tolls' Discussion paper TI, no. 09-009/3, Tinbergen Instituut, Amsterdam.

Manipulable Congestion Tolls. / Brueckner, Jan K.; Verhoef, Erik T.

Amsterdam : Tinbergen Instituut, 2009. (Discussion paper TI; No. 09-009/3).

Research output: Working paperProfessional

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Brueckner JK, Verhoef ET. Manipulable Congestion Tolls. Amsterdam: Tinbergen Instituut. 2009. (Discussion paper TI; 09-009/3).