Modern congestion pricing, by Cramton, Geddes and Ockenfels

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Modern congestion pricing, by Cramton, Geddes and Ockenfels

Here's a short paper in the July 31 Nature:
Set road charges in real time to ease traffic
Track vehicles to link tolls with demand and cut congestion, urge Peter Cramton, R. Richard Geddes and Axel Ockenfels


And here's the longer working paper:
Markets for Road Use: Eliminating Congestion through Scheduling, Routing, and Real-Time Road Pricing
Peter Cramton, R. Richard Geddes, and Axel Ockenfels

Their vision:

"Efficient pricing of network capacity is not new. Indeed, wholesale electricity markets have been dynamically priced for over a decade. Communications markets are adopting dynamic pricing today. Efficient pricing of road use, however, has only recently become feasible. Advances in mobile communications make it possible to identify and communicate the location of a vehicle to within one cubic meter—allowing precise measurement of road use. User preferences can be communicated both in advance to determine scheduled transport and in real time to optimize routes based on the latest information. Computer advances also facilitate efficient scheduling and pricing of road use. Consumer apps help road users translate detailed price information into preferred transport plans. Computers also allow an independent system operator to better model demand and adjust prices to eliminate congestion and maximize the total value of road infrastructure. An independent market monitor, distinct from the
operator, observes the market, identifies problems, and suggests solutions. A board governs the market subject to regulatory oversight."


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