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Congestion Pricing Economic Models and international experience

Outline. IntroductionMotivationMicroeconomic foundationsCongestion Pricing ModelsStatic vs. dynamic pricingProfit-maximizing vs. social-welfare maximizing pricingSocial-welfare maximizing pricingCongestion pricing models: a conclusionInternational Experience and Research Vision. 2. Motivati

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Congestion Pricing Economic Models and international experience

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    1. Congestion Pricing Economic Models and international experience Aya Aboudina, PhD Student Civil Engineering Dept, University of Toronto 1

    2. Outline Introduction Motivation Microeconomic foundations Congestion Pricing Models Static vs. dynamic pricing Profit-maximizing vs. social-welfare maximizing pricing Social-welfare maximizing pricing Congestion pricing models: a conclusion International Experience and Research Vision 2

    3. Motivation Users/consumers should pay the full cost of whatever they consume Otherwise, they are subsidized Therefore, they unnecessarily consume more to the detriment of all i.e. “Tragedy of the Commons” Garrett Hardin, journal Science in 1968 3 Add to Motivation: Boosting traffic flow up to capacity Reducing trip delay through departure time reschedulingAdd to Motivation: Boosting traffic flow up to capacity Reducing trip delay through departure time rescheduling

    4. Tragedy of the Commons 4 A dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource even when it is clear that it is not in anyone's long-term interest for this to happen. Examples: Overgrazing Congestion Criticized for promoting privatization Used here to encourage “control”

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