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Abstract: The Interaction between Tolls and Capacity Investment in Serial and Parallel Transport Networks
Abstract
The Interaction between Tolls and Capacity Investment in Serial and Parallel Transport Networks
The Review of Network Economics
Vol. 7, Issue 1 - March 2008, pp 136 - 158
Authors
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Bruno De Borger
Department of Economics, University of Antwerp
E-mail: bruno.deborger@ua.ac.be
Fay Dunkerley
Department of Economics, Catholic University Leuven
Stef Proost
Department of Economics, Catholic University Leuven
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Abstract
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The purpose of this paper is to compare price and capacity competition in simple serial and parallel transport networks, where individual links are operated by different authorities. We find more tax exporting in serial transport corridors than on parallel road networks. The inability to toll transit has quite dramatic negative welfare effects on parallel networks; in serial transport corridors, it may actually be undesirable to allow the tolling of transit at all. Finally, if the links are exclusively used by transit transport, toll and capacity decisions are independent in serial networks. When regions compete for transit in a parallel setting, higher regional capacity implies lower Nash equilibrium tolls.
Keywords: transport networks, toll competition, optimal investment
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