There has been wide interest in private supply of roads as a solution to traffic congestion. We study its efficiency under demand uncertainty: we solve for equilibrium and optimum as benchmarks, and evaluate the efficiency of possible regulatory policies for private road operators. We obtain...

In the face of capacity disruptions (due, for example, to traffic incidents or poor weather), information provision and congestion pricing are alternative alleviating policies. A state-dependent toll equals the state-dependent marginal external cost (MEC), which is higher if traffic condition is...

We study the efficiency of private supply of roads under demand uncertainty and evaluate various regulatory policies. Due to demand uncertainty, capacity is decided before demand is known but tolls can be adjusted after demand is known. Policy implications can differ considerably from those...