Tolling, Capacity Selection and Equilibrium Problems with Equilibrium Constraints

An Equilibrium problem with an equilibrium constraint is a mathematical construct that can be applied to private competition in highway networks. In this paper we consider the problem of finding a Nash Equilibrium regarding competition in toll pricing on a network utilising 2 alternative algorithms. In the first algorithm, we utilise a Gauss Siedel fixed point approach based on the cutting constraint algorithm for toll pricing. In the second algorithm, we extend an existing sequential linear complementarity approach for finding Nash equilibrium subject to Wardrop Equilibrium constraints. Finally we consider how the equilibrium may change between the Nash competitive equilibrium and a collusive equilibrium where the two players co-operate to form the equivalent of a monopoly operation

Why States Toll: An Empirical Model of Finance Choice

This paper examines the question of why some states impose tolls while others rely more heavily on gas and other taxes. A model to predict the share of street and highway revenue from tolls is estimated as a function of the share of non-resident workers, the policies of neighboring states, historical factors, and population. The more non-resident workers, the greater the likelihood of tolling, after controlling for the miles of toll road planned or constructed before the 1956 Interstate Act. Similarly if a state exports a number of residents to work out-of-state and those neighboring states toll, it will be more likely to retaliate by imposing its own tolls than if those states don't. The policy implications for the future of congestion pricing are clear, if hard to implement. Decentralization of finance and control of the road network from the federal to the state, metropolitan and city and county levels of government will increase the incentives for the highway-managing jurisdiction to impose tolls. And tolls are a necessary prerequisite for an economically efficient strategy of congestion pricing.

Strategic investment and pricing decisions in a congested transport corridor

This paper studies pricing and investment decisions on a congested transport corridor where the elements of the corridor are controlled by different governments. A corridor can be an interstate highway or railway line, or an inter-modal connection. We model the simplest corridor: two transport links in series, where each of the links is controlled by a different government. Each link is used by transit as well as by local traffic; both links are subject to congestion. We consider a two stage non-cooperative game where both governments strategically set capacity in the first stage and play a pricing game in the second stage. Three pricing regimes are distinguished: (i) differentiated tolls between local and transit transport, (ii) one uniform toll on local and transit traffic, and (iii) only the local users can be tolled. Numerical analysis illustrates all theoretical insights. A number of interesting results are obtained. First, transit tolls on the network will be inefficiently high. If only local traffic can be tolled, however, the Nash equilibrium tolls are inefficiently low. Second, raising the toll on transit through a given country by one euro raises the toll on the whole trajectory by less than one euro. Third, higher capacity investment in a given region not only reduces optimal tolls in this region under all pricing regimes but it also increases the transit tolls on the other link of the corridor. Fourth, capacities in the different regions are strategic complements: when one country on the corridor increases transport capacity, it forces the other country to do the same. Fifth, we find interesting interactions between optimal capacities and the set of pricing instruments used: capacity with differentiated tolls is substantially higher than in the case of uniform tolls but overall welfare is lower. Finally, if transit is sufficiently important, it may be welfare improving not to allow any tolling at all, or to only allow the tolling of locals.congestion pricing, transport investment, transit traffic

Strategic investment and pricing decisions in a congested transport corridor.

This paper studies pricing and investment decisions on a congested transport corridor where the elements of the corridor are controlled by different governments. A corridor can be an interstate highway or railway line, or an inter-modal connection. We model the simplest corridor: two transport links in series, where each of the links is controlled by a different government. Each link is used by transit as well as by local traffic; both links are subject to congestion. We consider a two stage noncooperative game where both governments strategically set capacity in the first stage and play a pricing game in the second stage. Three pricing regimes are distinguished: (i) differentiated tolls between local and transit transport, (ii) one uniform toll on local and transit traffic, and (iii) only the local users can be tolled. Numerical analysis illustrates all theoretical insights. A number of interesting results are obtained. First, transit tolls on the network will be inefficiently high. If only local traffic can be tolled, however, the Nash equilibrium tolls are inefficiently low. Second, raising the toll on transit through a given country by one euro raises the toll on the whole trajectory by less than one euro. Third, higher capacity investment in a given region not only reduces optimal tolls in this region under all pricing regimes but it also increases the transit tolls on the other link of the corridor. Fourth, capacities in the different regions are strategic complements: when one country on the corridor increases transport capacity, it forces the other country to do the same. Fifth, we find interesting interactions between optimal capacities and the set of pricing instruments used: capacity with differentiated tolls is substantially higher than in the case of uniform tolls but overall welfare is lower. Finally, if transit is sufficiently important, it may be welfare improving not to allow any tolling at all, or to only allow the tolling of locals.Investment; Pricing; Decisions; Decision; Transport;

Regional Toll Roads and Median Income: An Examination of The Relationship Between Toll Roads and Community Realities

Congestion pricing is viewed as a resource that will charge drivers a fee for operating specific lanes of the roadway. This fee aids in decreasing traffic congestion by having drivers utilize additional roadway space. This resource of toll pricing can also address the importance of decreasing the carbon footprint from highway travel. Various transportation sources have reported traffic congestion on roadways will increase as the United States population will increase. This research will examine the relationship between toll rates and the income of regional populations within the Houston tolling system. The Sam Houston 288 Express Toll Road and The Westpark Toll Road will be studied to determine the average cost of a 15-mile trip for gasoline vehicles. Data presented in this research may reveal the cost burden if any is experienced by drivers who access the toll in Houston communities. The cost burden and the cost of transportation are two important key factors that will shape the concept of equity within this report. This research aims to provide a better understanding of the advantages and disadvantages of accessing toll roads within Houston and how this experience will shape the future of transportation for drivers

Commuter Behavioral Model for the Pilot Program of an Electronic Toll System on Korea Express Highways

In recent years, congestion pricing has gained popularity as a method for managing peak-period congestion on major roads in urban areas. Intelligent Transportation Systems (ITS) technology has resulted in an electronic toll collection (ETC) system called “Hi-Pass,” which is operated by the Korea Highway Cooperation for the pilot program. The limited sections of highway involved in the program have gained good approval ratings from motorists. In this research, the Korean highway toll system was analyzed with respect to the brief legal history of the toll road, collection method and levels. In addition, the electronic toll collection policy for foreign countries including France, Norway, and Italy are investigated. The toll system of each country is clearly differentiated with regard to the institution, regulation and the country’s economy. In the review of the pilot ETC program “Hi-pass” system in Korea, several important factors were found. First, a more concrete marketing strategy for ETC users will needed to encourage continued usage. In particular, frequent users and higher-income users adopted the ETC system more easily than others did. Second, in order to encourage the non-user to try the ETC system, the costs of on-board units must be kept reasonably low (about $50), and aggressive discounts (about 3-5% compared to the current 1%) are needed

Policy Issues in U.S. Transportation Public-Private Partnerships: Lessons from Australia, Research Report 09-15

In this report, the authors examine Australia’s experience with transportation public-private partnerships (PPPs) and the lessons that experience holds for the use of PPPs in the United States. Australia now has decades of experience in PPP use in transportation, and has used the approach to deliver billions of dollars in project value. Although this report explores a range of issues, the authors focus on four policy issues that have been salient in the United States: (1) how the risks inherent in PPP contracts should be distributed across public and private sector partners; (2) when and how to use non-compete (or compensation) clauses in PPP contracts; (3) how concerns about monopoly power are best addressed; and (4) the role and importance of concession length. The study examines those and other questions by surveying the relevant literature on PPP international use. The authors also interviewed 23 Australian PPP experts from the academic, public and private sectors, and distilled lessons from those interviews

Comparison of Different Toll Policies in the Dynamic Second-best Optimal Toll Design Problem: Case study on a Three-link network

In this paper, the dynamic optimal toll design problem is considered as a one leader-many followers hierarchical non-cooperative game. On a given network the road authority as the leader tolls some links in order to reach its objective, while travelers as followers minimize their perceived travel costs. So far toll has always been considered either as constant or as time-varying. Inspired by the San Diego's Interstate 15 congestion pricing project, in which heuristics with toll proportional to traffic flow are applied on a real two-link highway network, we consider toll as proportional to traffic flows in the network. On a three-link network we investigate various toll schemes and their influence on the outcome of the game for the road authority. We show that the use of alternative toll schemes may improve system performance remarkably

How Effective are Toll Roads in Improving Operational Performance?

The main focus of this research is to develop a systematic analytical framework and evaluate the effect of a toll road on region’s traffic using travel time and travel time reliability measures. The travel time data for the Triangle Expressway in Raleigh, North Carolina, United States was employed for the assessment process. The spatial and temporal variations in the travel time distributions on the toll road, parallel alternate route, and near-vicinity cross-streets were analyzed using various travel time reliability measures. The results indicate that the Triangle Expressway showed a positive trend in reliability over the years of its operation. The parallel route reliability decreased significantly during the analysis period, whereas the travel time reliability of cross-streets showed a consistent trend. The stabilization of travel time distributions and the reliability measures over different years of toll road operation are good indicators, suggesting that further reduction in performance measures may not be seen on the near vicinity corridors. The findings from link-level and corridor-level analysis may help with transportation system management, assessing the influence of travel demand patterns, and evaluating the effect of planned implementation of similar projects