Accident externalities that individual drivers impose on one another via their presence on the road are among the most important external costs of road transport. We study the regulation of these externalities when insurance companies have market power. Some of the results we derive have close...

We consider a monocentric city where a traffic bottleneck is located at the entrance of the central business district. The commuters’ departure times from home, residential locations, and lot sizes, are all endogenous. We show that elimination of queuing time under optimal road pricing induces...

This paper analyzes efficient pricing at a congested airport dominated by a single firm. Unlike much of the previous literature, we combine a dynamic bottleneck model of congestion and a vertical structure model that explicitly considers the role of airlines and passengers. We show that a...

In most dynamic traffic congestion models, congestion tolls must vary continuously over time to achieve the full optimum. This is also the case in Vickrey (1969) ‘bottleneck model’. To date, the closest approximations of this ideal in practice have so-called ‘step tolls’, in which the...

The recent literature on congestion pricing with large agents contains a remarkable inconsistency: though agents are large enough to recognize self-imposed congestion and exert market power over prices, they do not take into account the impact of their own actions on the magnitude of congestion...