There are constraints on pricing congestible facilities. First, if heterogeneous users are observationally indistinguishable, then congestion charges must be anonymous. Second, the time variation of congestion charges may be constrained. Do these constraints undermine the feasibility of marginal...

It is well known that, for a congestible facility with a constant long-run average cost, the revenue from the unconstrained optimal toll (set so that each individual faces marginal (social) cost of a use) covers the cost of optimal capacity. This paper investigates under what circumstances the...

This paper considers the second-best policy problem that arises when auto travel is priced below its marginal cost and there is a substitute mass transit mode. We analyze the problem by combining a model of a rail line based on Kraus and Yoshida (JUE (2002)) with the highway bottleneck model....

This paper is concerned with the application of microeconomic theory to resource allocation in the transportation sector. The basic questions it addresses are how transportation should be priced and how capacity should be determined. Three models, the traditional highway pricing and investment...

This paper asks the question, "How should the level of mass transit service be adjusted when road pricing is introduced for a substitute auto mode?" The reference point for the introduction of road pricing is second-best optimization in transit. Because this involves below- marginal-cost pricing...