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Congestion with heterogeneous commuters

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  • An, Yonghong
  • Zhang, Zhixiang

Abstract

We study a congestion model where a continuum of heterogeneous commuters make a binary choice between riding a bus and driving private vehicles for their commutes. Formulating the model as a large game, we establish the existence and uniqueness of a nontrivial Nash equilibrium and analyze how a gasoline tax affects the allocation of commuters between public transportation and private vehicles at the equilibrium. Based on the analysis, we provide a sufficient condition under which a gasoline tax is Pareto improving. We also prove the existence of a socially optimal policy that minimizes the aggregate loss to all commuters.

Suggested Citation

  • An, Yonghong & Zhang, Zhixiang, 2012. "Congestion with heterogeneous commuters," Economic Modelling, Elsevier, vol. 29(3), pages 557-565.
    • Handle: RePEc:eee:ecmode:v:29:y:2012:i:3:p:557-565
    DOI: 10.1016/j.econmod.2011.12.014
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    Cited by:

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    3. Li, Zhi-Chun & Lam, William H.K. & Wong, S.C., 2017. "Step tolling in an activity-based bottleneck model," Transportation Research Part B: Methodological, Elsevier, vol. 101(C), pages 306-334.
    4. Liu, Yang & Li, Yuanyuan & Hu, Lu, 2018. "Departure time and route choices in bottleneck equilibrium under risk and ambiguity," Transportation Research Part B: Methodological, Elsevier, vol. 117(PB), pages 774-793.
    5. Liu, Peng & Liu, Jielun & Ong, Ghim Ping & Tian, Qiong, 2020. "Flow pattern and optimal capacity in a bi-modal traffic corridor with heterogeneous users," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 133(C).
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    7. Yang, Hai & Liu, Wei & Wang, Xiaolei & Zhang, Xiaoning, 2013. "On the morning commute problem with bottleneck congestion and parking space constraints," Transportation Research Part B: Methodological, Elsevier, vol. 58(C), pages 106-118.
    8. Kim, Jeong-Yoo & Lee, Myeong Ho & Berg, Nathan, 2016. "Peak-load pricing in duopoly," Economic Modelling, Elsevier, vol. 57(C), pages 47-54.

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    More about this item

    Keywords

    Heterogeneous commuters; Nash equilibrium; Greenshields' model; Traffic congestion;
    All these keywords.

    JEL classification:

    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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