Abstract
The Tradable Bottleneck Permits (TBP) scheme is one of the first-best time-varying road pricing schemes. In order to resolve the congestion problem during the morning rush hours at a single bottleneck, the scheme provides these functions as: (i) a road administrator issues permits that allow the holders to pass through the bottleneck at a pre-specified time period (“bottleneck permits”), (ii) a new trading market is established for bottleneck permits valid for a pre-specified time period (Akamatsu 2007). When the amount of the issued bottleneck permits is equal to the bottleneck capacity, congestion is completely eliminated and thus the social cost is minimized. However, it is not revealed that the scheme could achieve a Pareto improvement in a merge network.
This study aims to analyze the effects of applying TBP in a merge network. We employed V-shaped network and showed that TBP in not always Pareto improving. TBP eliminates physical queues and some drivers' cost increase be-cause a merging priority rule is not effective when there are no queues. In order to achieve a Pareto improvement, we proposed three methodology: (i) Differentiated permit, (ii) Monetary compensation, and (iii) Finance expansion of bottleneck. The first one is that the road administrator assigns the permits for each group so as not to increase the trip cost to any drivers. The second one is that the road administrator pay money back to drivers whose cost increases. The last one is that bottleneck capacity is expanded by using the TBP revenue. This method is the most effective from the perspective of social cost minimization.
