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Principle of marginal-cost pricing: how does it work in a general road network?

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  • Yang, Hai
  • Huang, Hai-Jun

Abstract

Most previous theoretical arguments on congestion pricing are based on the fundamental economic principle of marginal-cost pricing, and are entirely concerned with abstract travel demand-supply models. There exists in the literature considerable confusion on analysis of congestion which needs to be clarified. There are also many interesting, and important issues to be explored when detailed network modeling is involved. This paper makes a theoretical investigation into how this classical economic principle would work in a general congested road network. Some new explanations of the marginal-cost pricing and its implications under different equilibrium conditions are presented.

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  • Yang, Hai & Huang, Hai-Jun, 1998. "Principle of marginal-cost pricing: how does it work in a general road network?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 32(1), pages 45-54, January.
    • Handle: RePEc:eee:transa:v:32:y:1998:i:1:p:45-54
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