class14congestn

class14congestn - Fall 2004 Urban OR(1.203J/6.281J/etc...

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1 Fall 2004 Urban OR (1.203J/6.281J/etc.) Congestion Pricing and Queueing Theory Congestion Pricing Congestion costs due to any specific user have 2 components: (1) Cost of delay to that user (internal ) (2) Cost of delay to all other users caused by that user (external ) --At congested airports (and congested facilities, in general) this second component can be very large --A congestion toll can be imposed to force users to experience this cost component (to internalize the external costs) Economic principle Optimal use of a transportation facility cannot be achieved unless each additional (marginal) user pays for all the additional costs that this user imposes on all other users and onthe facility itself. Thus, a congestion toll not only contributes to a socially desirable result, but is necessary to reach such a result. (Vickrey, 1967; Carlin + Park, 1970) Congestion Pricing and Queueing Theory In practice it is very hard to: (1) Estimate external marginal delay costs (extensive data analysis or difficult simulation is typically needed); (2) Determine equilibrium congestion tolls (trial-and error approach that may take long time to converge is used sometimes).
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