Abstract
This paper extends the conventional static marginal cost analysis to the dynamic one based on the time-dependent analysis of traffic flow at a bottleneck. Since congestion phenomena are time-dependent, the supply function is reformulated dynamically over time and the dynamic marginal cost is defined. As the result, the marginal cost is shown to be more closely related to the duration of congestion period than the personal cost. This result represents characteristics of dynamic congestion that a slight change of demand at some time affects traffic condition thereafter. Next, the analysis is modified based on the previous studies so that it includes the departure time choice. In this case, it is shown that the dynamic marginal cost depends on users' desired arrival times at destinations, and the dynamic marginal cost pricing scheme is discussed.
