A first best toll pricing framework for variable demand traffic assignment problems

Abstract

In this paper, we present a toll pricing framework for a general variable demand traffic assignment problem with side constraints, where the demand between an origin destination pair is a function of the least total travel cost for making the trip. This general demand model unifies earlier toll pricing treatments of the variable demand models including elastic demand traffic assignment problems and combined distribution assignment problems. All of these models have the constant toll revenue property. Given that users experience the side constraints, we show that when they are charged by a toll vector in the first best toll set, the system optimal flows and demands are achieved. We then present a toll pricing framework by which a traffic planner might find the most appropriate toll vector given certain restrictions and objectives on the network. Finally, we derive the toll sets and illustrate the toll pricing framework for specific instances of the general variable demand models.