The independence of volume‐capacity ratio of private toll roads in general networks

The independence of volume‐capacity ratio of private toll roads in general networks

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Article ID: iaor20108395
Volume: 45
Issue: 1
Start Page Number: 96
End Page Number: 101
Publication Date: Jan 2011
Journal: Transportation Research Part B
Authors: , ,
Keywords: tolls
Abstract:

In a general traffic network under some widely used assumptions, this paper proves that the level of service, represented by the volume‐capacity (v/c) ratio, offered by a profit-maximizing private firm on a private toll road is independent of another competitor’s choice of capacity and toll rate for another private toll road. The v/c ratio will be the same as the one provided by a centralized welfare-maximizing traffic authority. Moreover, the ratio remains the same even in a regulated market where the authority imposes a cap for the generalized travel cost on the private toll road.

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