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Pareto-improving transportation network design and ownership regimes

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  • Tan, Zhijia
  • Yang, Hai
  • Tan, Wei
  • Li, Zhichun

Abstract

Private provision of public roads signifies co-existence of free, public-tolled and private-tolled roads. This paper investigates the Pareto-improving transportation network design problem under various ownership regimes by allowing joint choice of road pricing and capacity enhancement on free links. The problem of interest is formulated as a bi-objective mathematical programming model that considers the travel cost of road users in each origin-destination pair and the investment return of the whole network. The non-dominated Pareto-improving solutions of toll and/or capacity enhancement schemes are sought for achieving a win-win situation. A sufficient condition is provided for the existence of the non-dominated Pareto-improving schemes and then the properties of those schemes are analyzed. It is found that, under some mild assumptions, the optimal capacity enhancement is uniquely determined by the link flow under any non-dominated Pareto-improving scheme. As a result, the joint road pricing and capacity enhancement problem reduces to a bi-objective second-best road pricing problem. A revenue distribution mechanism with return rate guarantee is proposed to implement the non-dominated Pareto-improving schemes.

Suggested Citation

  • Tan, Zhijia & Yang, Hai & Tan, Wei & Li, Zhichun, 2016. "Pareto-improving transportation network design and ownership regimes," Transportation Research Part B: Methodological, Elsevier, vol. 91(C), pages 292-309.
    • Handle: RePEc:eee:transb:v:91:y:2016:i:c:p:292-309
    DOI: 10.1016/j.trb.2016.04.024
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    4. Behbahani, Hamid & Nazari, Sobhan & Jafari Kang, Masood & Litman, Todd, 2019. "A conceptual framework to formulate transportation network design problem considering social equity criteria," Transportation Research Part A: Policy and Practice, Elsevier, vol. 125(C), pages 171-183.
    5. Qiumin Liu & Vincent A.C. van den Berg & Erik T. Verhoef & Rui Jiang, 2024. "Pricing in the Stochastic Bottleneck Model with Price-Sensitive Demand," Tinbergen Institute Discussion Papers 24-011/VIII, Tinbergen Institute, revised 22 Oct 2024.
    6. Najmi, Ali & Waller, Travis & Rashidi, Taha H., 2023. "Equity in network design and pricing: A discretely-constrained MPEC problem," Transportation Research Part A: Policy and Practice, Elsevier, vol. 176(C).

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