Micro-foundations of Congestion and Pricing: A Game Theory Perspective

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Micro-foundations of Congestion and Pricing: A Game Theory Perspective

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2005

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Elsevier

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Abstract

This paper develops congestion theory and congestion pricing theory from its microfoundations, the interaction of two or more vehicles. Using game theory, with a two-player game it is shown that the emergence of congestion depends on the players-relative valuations of early arrival, late arrival, and journey delay. Congestion pricing can be used as a cooperation mechanism to minimize total costs (if returned to the players). The analysis is then extended to the case of the three-player game, which illustrates congestion as a negative externality imposed on players who do not themselves contribute to it.

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http://dx.doi.org/doi:10.1016/j.tra.2005.02.021

Previously Published Citation

Levinson, David (2005) Micro-foundations of Congestion and Pricing: A Game Theory Perspective. Transportation Research part A 39(7-9) 691-704.

Suggested citation

Levinson, David M. (2005). Micro-foundations of Congestion and Pricing: A Game Theory Perspective. Retrieved from the University Digital Conservancy, http://dx.doi.org/doi:10.1016/j.tra.2005.02.021.

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