Report
English

Information, Welfare and Usage of Gongestible Facilities Under Different Pricing Regimes

Collection
  • Cahiers de recherche; 1995.22
Publication date1995
Abstract

Uncertainty about usage conditions is common in a wide range of congestible facilities, including roads, computer systems, outdoor recreational areas and entertainment events. Uncertainty can be reduced by providing information to prospective users via conventional means, such as radio reports, as well as by new information technologies such as Advanced Traveler Information Systems. However, congestion pricing must be implemented in tandem with information provision if congestion externalities are to be internalized. In this paper we consider the effects of information provision on usage of a congestible facility under three pricing regimes: free access, uniform pricing - whereby tolls are set at the same value each day, and responsive pricing - whereby tolls are set conditional on the information that is provided to users. We show that with either free access or uniform pricing, better information can induce changes in usage that reduce expected social surplus. By contrast, responsive pricing not only yields the greatest efficiency gains, but guarantees that better information is welfare-improving. The welfare gains from information and either from of pricing can be superadditive or subadditive, in the sense that the benefits form implementing them jointly can be larger or smaller than the sum of benefits from implementing each independently. Superaddivity is more likely to obtain when demand is price elastic

Citation (ISO format)
DE PALMA, André, LINDSEY, Robin. Information, Welfare and Usage of Gongestible Facilities Under Different Pricing Regimes. 1995
Identifiers
  • PID : unige:5972
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Update14/03/2023 15:27:09
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