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A platform for research: civil engineering, architecture and urbanism
A note on the distortionary effects of revenue-neutral tolls in a bottleneck congestion game
Abstract This note demonstrates how the redistribution of revenue from a Pigouvian policy can distort incentives and handicap the social objectives of the policy by creating a moral hazard problem. Based on the Levinson (2005) game theory model, I develop a three-player bottleneck congestion game that emulates a repeated prisoner’s dilemma and derive efficient tolls. This conceptual game demonstrates the distortionary effects from a revenue-neutral toll policy with lump-sum revenue redistribution and the equity-efficiency tradeoff.
A note on the distortionary effects of revenue-neutral tolls in a bottleneck congestion game
Abstract This note demonstrates how the redistribution of revenue from a Pigouvian policy can distort incentives and handicap the social objectives of the policy by creating a moral hazard problem. Based on the Levinson (2005) game theory model, I develop a three-player bottleneck congestion game that emulates a repeated prisoner’s dilemma and derive efficient tolls. This conceptual game demonstrates the distortionary effects from a revenue-neutral toll policy with lump-sum revenue redistribution and the equity-efficiency tradeoff.
A note on the distortionary effects of revenue-neutral tolls in a bottleneck congestion game
Janusch, Nicholas (author)
Transportation Research Part A: Policy and Practice ; 92 ; 95-103
2016-07-19
9 pages
Article (Journal)
Electronic Resource
English
C72 , R48 , Q58 , Game theory , Congestion , Pricing , Revenue recycling , Acceptability
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