CONGESTION TOLLING FOR UNIFORM AND NONUNIFORM DEMAND CYCLES WHEN TOLL-REVENUE BENEFITS ARE DISCOUNTED

Lee and Wilson (1990) have argued that public sector objectives may ne ed to be modified when the revenue generated by price rationing induce s wasteful, rent-seeking expenditures. The striking results derived fr om their proposed modification do not, however, extend to the importan t class of congestible facilities. This paper explicitly models conges tible facilities and shows that rent-seeking always dictates lower ful l-user-cost prices and tolls than those indicated by the conventional objective, but the surprising peak-load tolling possibilities suggeste d by Lee and Wilson still apply. It is also shown that rationales for these results are more general than rent-seeking.