Promoting social equity with cyclic tradable credits

Abstract

This study manages the network mobility with link-based cyclic tradable credit scheme (CTCS) in a general transportation network. Different from most previous studies on tradable credit schemes, which always assume an independent periodic credit distribution scheme to maintain the circulation of the credits in the system with nonnegative credit charges, in our model the compensatory credits could be charged from (i.e. positive credit rate) or subsidized to (i.e. negative credit rate) the travelers. With the introduction of cyclic tradable credit scheme, we pursue three objectives: system optimization, social equity, and most importantly, credit internal cycling without periodic credit expiration and distribution. We formulate a minimization problem to solve for the scheme to fulfill the three objectives and discuss the existence of the solution via the dual problem. We prove that there is no negative cycle under the proposed CTCS, and when the origin-destination (OD) matrix of the network satisfies certain conditions, the Pareto-improving solution exists. However, for general networks with origins and destinations overlapping with each other, the solution may not always exist. Nevertheless, in contrast to several traditional toll schemes, the equity among the travelers from different OD pairs under the proposed CTCS is still improved. Numerical experiments are provided to demonstrate the existence/nonexistence of the CTCS under different situations and to compare the performances among different schemes.