PRINCIPLE OF MARGINAL-COST PRICING - HOW DOES IT WORK IN A GENERAL ROAD NETWORK

Most previous theoretical arguments on congestion pricing are based on the fundamental economic principle of marginal-cost pricing, and are entirely concerned with abstract travel demand-supply models. There ex ists in the literature considerable confusion on analysis of congestio n which needs to be clarified. There are also many interesting, and im portant issues to be explored when detailed network modeling is involv ed. This paper makes a theoretical investigation into how this classic al economic principle would work in a general congested road network. Some new explanations of the marginal-cost pricing and its implication s under different equilibrium conditions are presented. (C) 1998 Elsev ier Science Ltd.