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Bisection-based trial-and-error implementation of marginal cost pricing and tradable credit scheme

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  • Wang, Xiaolei
  • Yang, Hai

Abstract

The purpose of this paper is three fold: First, it demonstrates the non-convergence of the bisection method proposed in the literature for the trial-and-error implementation of the marginal-cost pricing in the absence of a demand function. Second, it provides a modified version of the bisection method and establishes its convergence. Third, it adapts the modified bisection method for the trial-and-error implementation of the tradable credit scheme proposed recently, which can emulate a congestion pricing system in a revenue-neutral manner.

Suggested Citation

  • Wang, Xiaolei & Yang, Hai, 2012. "Bisection-based trial-and-error implementation of marginal cost pricing and tradable credit scheme," Transportation Research Part B: Methodological, Elsevier, vol. 46(9), pages 1085-1096.
    • Handle: RePEc:eee:transb:v:46:y:2012:i:9:p:1085-1096
    DOI: 10.1016/j.trb.2012.04.002
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    Cited by:

    1. Zhang, Fang & Lu, Jian & Hu, Xiaojian, 2021. "Tradable credit scheme design with transaction cost and equity constraint," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).
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    3. Xiao, Feng & Qian, Zhen (Sean) & Zhang, H. Michael, 2013. "Managing bottleneck congestion with tradable credits," Transportation Research Part B: Methodological, Elsevier, vol. 56(C), pages 1-14.
    4. Wang, Shuaian & Liu, Zhiyuan & Bell, Michael G.H., 2015. "Profit-based maritime container assignment models for liner shipping networks," Transportation Research Part B: Methodological, Elsevier, vol. 72(C), pages 59-76.
    5. Dao-Li Zhu & Hai Yang & Chang-Min Li & Xiao-Lei Wang, 2015. "Properties of the Multiclass Traffic Network Equilibria Under a Tradable Credit Scheme," Transportation Science, INFORMS, vol. 49(3), pages 519-534, August.
    6. Ren-Yong Guo & Hai-Jun Huang & Hai Yang, 2019. "Tradable Credit Scheme for Control of Evolutionary Traffic Flows to System Optimum: Model and its Convergence," Networks and Spatial Economics, Springer, vol. 19(3), pages 833-868, September.
    7. He, Fang & Yin, Yafeng & Shirmohammadi, Nima & Nie, Yu (Marco), 2013. "Tradable credit schemes on networks with mixed equilibrium behaviors," Transportation Research Part B: Methodological, Elsevier, vol. 57(C), pages 47-65.
    8. Louis Balzer & Ludovic Leclercq, 2021. "Modal equilibrium of a tradable credit scheme with a trip-based MFD and logit-based decision-making," Papers 2112.07277, arXiv.org, revised Apr 2022.
    9. Nie, Yu (Marco) & Yin, Yafeng, 2013. "Managing rush hour travel choices with tradable credit scheme," Transportation Research Part B: Methodological, Elsevier, vol. 50(C), pages 1-19.
    10. Jia, Zehui & Wang, David Z.W. & Cai, Xingju, 2016. "Traffic managements for household travels in congested morning commute," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 91(C), pages 173-189.
    11. Farokhi, Farhad & Johansson, Karl H., 2015. "A piecewise-constant congestion taxing policy for repeated routing games," Transportation Research Part B: Methodological, Elsevier, vol. 78(C), pages 123-143.
    12. Lie Han, 2022. "Proportional-Switch Adjustment Process with Elastic Demand and Congestion Toll in the Absence of Demand Functions," Networks and Spatial Economics, Springer, vol. 22(4), pages 709-735, December.
    13. Lessan, Javad & Fu, Liping & Bachmann, Chris, 2020. "Towards user-centric, market-driven mobility management of road traffic using permit-based schemes," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 141(C).
    14. Chen, Xinyuan & Zhang, Wei & Guo, Xiaomeng & Liu, Zhiyuan & Wang, Shuaian, 2021. "An improved learning-and-optimization train fare design method for addressing commuting congestion at CBD stations," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 153(C).
    15. Lahlou, Salem & Wynter, Laura, 2017. "A Nash equilibrium formulation of a tradable credits scheme for incentivizing transport choices: From next-generation public transport mode choice to HOT lanes," Transportation Research Part B: Methodological, Elsevier, vol. 101(C), pages 185-212.
    16. Wang, Shuaian & Zhang, Wei & Qu, Xiaobo, 2018. "Trial-and-error train fare design scheme for addressing boarding/alighting congestion at CBD stations," Transportation Research Part B: Methodological, Elsevier, vol. 118(C), pages 318-335.
    17. Ye, Hongbo & Yang, Hai, 2013. "Continuous price and flow dynamics of tradable mobility credits," Transportation Research Part B: Methodological, Elsevier, vol. 57(C), pages 436-450.
    18. Guo, Ren-Yong & Szeto, W.Y. & Long, Jiancheng, 2020. "Trial-and-error operation schemes for bimodal transport systems," Transportation Research Part B: Methodological, Elsevier, vol. 131(C), pages 106-123.
    19. Luetian Sun & Rui Song, 2022. "Improving Efficiency in Congested Traffic Networks: Pareto-Improving Reservations through Agent-Based Timetabling," Sustainability, MDPI, vol. 14(4), pages 1-24, February.
    20. Ren-Yong Guo & Hai Yang & Hai-Jun Huang & Zhijia Tan, 2016. "Day-to-Day Flow Dynamics and Congestion Control," Transportation Science, INFORMS, vol. 50(3), pages 982-997, August.
    21. Liu, Renming & Jiang, Yu & Seshadri, Ravi & Ben-Akiva, Moshe & Azevedo, Carlos Lima, 2024. "Contextual Bayesian optimization of congestion pricing with day-to-day dynamics," Transportation Research Part A: Policy and Practice, Elsevier, vol. 179(C).
    22. Xu, Meng & Grant-Muller, Susan, 2016. "Trip mode and travel pattern impacts of a Tradable Credits Scheme: A case study of Beijing," Transport Policy, Elsevier, vol. 47(C), pages 72-83.
    23. Ye, Hongbo & Yang, Hai & Tan, Zhijia, 2015. "Learning marginal-cost pricing via a trial-and-error procedure with day-to-day flow dynamics," Transportation Research Part B: Methodological, Elsevier, vol. 81(P3), pages 794-807.
    24. Nie, Yu (Marco), 2017. "On the potential remedies for license plate rationing," Economics of Transportation, Elsevier, vol. 9(C), pages 37-50.

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