Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/86693 
Year of Publication: 
2009
Series/Report no.: 
Tinbergen Institute Discussion Paper No. 09-009/3
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
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 tolls. When large agents are confronted with tolls derived under this parametric assumption but understand the rule used to generate them, the toll system will no longer guide the market to the social optimum. To address this problem, the present paper derives alternate, manipulable toll rules, which are designed to achieve the social optimum when agents anticipate the full impact of their actions on toll liabilities.
Subjects: 
Congestion pricing
market power
aviation
JEL: 
R41
R48
D62
Document Type: 
Working Paper

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