This paper extends a standard model of welfare optimal peak-period congestion tolls to take into account two characteristics of typical European labor markets, viz. wage bargaining and the increasing potential of telecommuting as an alternative to working on-the-job. Specifically, we consider...

In this paper we study optimal congestion pricing in a wage bargaining model. We first show that, compared to a competitive labour market environment, wage bargaining may lead to substantially different optimal transport taxes. Second, bargaining implies that exogenous increases in congestion...