Information provision and congestion pricing in a risky two-route network with heterogeneous travelers

Abstract

Travel information and congestion pricing are two major approaches to relieving congestions. This paper examines travelers’ travel strategies and route choices in a road network with a risky route and a safe route, where travel information pricing are jointly implemented. We derive the equilibrium of the risk-averse travelers with heterogeneous Values of Time (VOTs) under various information regimes. We find that information regarding the risky road conditions would not necessarily improve the expected system travel time. When there is no toll, free information surprisingly makes congestion worse. When information is not free, congestion may be reduced if both toll and information are properly priced. We also examine the distributional effects of information provision across travelers with different VOTs. Travelers with low VOTs who do not use information are not affected by the price of information. Travelers with intermediate VOTs always benefit from information provision regardless of its price. Finally, travelers with high VOTs are better off when the information price exceeds a threshold.