A smart market for passenger road transport (SMPRT) congestion: an application of computational mechanism design. (English) Zbl 1201.91062
Summary: To control and price negative externalities in passenger road transport, we develop an innovative and integrated computational agent-based economics (ACE) model to simulate a market oriented “cap” and trade system. (i) First, there is a computational assessment of a digitized road network model of the real-world congestion hot spot to determine the “cap” of the system in terms of vehicle volumes at which traffic efficiency deteriorates and the environmental externalities take off exponentially. (ii) Road users submit bids with the market-clearing price at the fixed “cap” supply of travel slots in a given time slice (peak hour) being determined by an electronic sealed bid uniform price Dutch auction. (iii) Cross-sectional demand data on car users who traverse the cordon area is used to model and calibrate the heterogeneous bid submission behaviour in order to construct the inverse demand function and demand elasticities. (iv) The willingness to pay approach with heterogeneous value of time is contrasted with the generalized cost approach to pricing congestion with homogeneous value of travel time.
MSC:
| 91B24 | Microeconomic theory (price theory and economic markets) |
| 91B26 | Auctions, bargaining, bidding and selling, and other market models |
| 68T42 | Agent technology and artificial intelligence |
| 91B69 | Heterogeneous agent models |
Keywords:
congestion charging; negative externalities; agent-based computational auction design; “cap” and trade smart market; willingness to pay; cross-sectional demand analysisReferences:
| [1] | Allen, P. M., Cities and Regions as Self-Organising Systems: Models of Complexity (1997), Taylor & Francis: Taylor & Francis London |
| [2] | Allen, P. M., Cities and regions as evolutionary complex systems, Geographical Systems, 4, 103-130 (1997) |
| [3] | Andreoni, J.; Miller, J. J., Auctions with artificial adaptive agents, Games and Economic Behaviour, 10, 39-64 (1995) · Zbl 0832.90019 |
| [4] | Bower, J.; Bunn, D., Experimental analysis of the efficiency of uniform-price vs. discriminatory auctions in the England and Wales electricity market, Journal of Economic Dynamics and Control \(,, 25, 561-592 (2001)\) · Zbl 0956.91038 |
| [5] | Blythe, P. T., A Description of ADEPT Demonstration of Congestion Management Equipment in the City of Cambridge (1993), Commission of European Communities |
| [6] | Brownstone, D.; Ghosh, A.; Golob, T.; Kazimi, C.; van, A. D., Drivers’ willingness-to-pay to reduce travel time: evidence from the San Diego I-15 congestion pricing project, Transportation Research A, 37, 2, 373-387 (2002) |
| [7] | Bunn, D. W.; Oliveira, F. S., Agent-based simulations: an application to the new electricity trading arrangements of England and Wales, IEEE Transactions on Evolutionary Computation, 5, 5, 493-503 (2001), (special issue: Agent Based Computational Economics) |
| [8] | Dash, R., Jennings, N.R., Parkes, D.C., 2003. Computational mechanism design: a call to arms. IEEE Intelligent System November-December, 40-47.; Dash, R., Jennings, N.R., Parkes, D.C., 2003. Computational mechanism design: a call to arms. IEEE Intelligent System November-December, 40-47. |
| [9] | Erev, I.; Roth, A., Predicting how people play games: reinforcement learning in experimental games with unique, mixed strategy equilibria, American Economic Review, 88, 848-881 (1998) |
| [10] | Friedman, D.; Sunder, S., Experimental Methods: A Primer for Economists (1994), Cambridge University Press: Cambridge University Press Cambridge · Zbl 0821.90040 |
| [11] | Goodwin, P., A review of new demand elasticities with reference to short and long run effects to price changes, Journal of Transport Economics and Policy, 26, 155-159 (1992) |
| [12] | Goodwin, P.; Dargay, J.; Hanly, M., Elasticities of road traffic and fuel consumption with respect to price and income: a review, Transport Reviews, 24, 275-292 (2004) |
| [13] | Hardin, G., The tragedy of the commons, Science, 162, 1243-1248 (1968) |
| [14] | Joskow, P.; Schmalensee, R.; Bailey, E., The market for sulphur dioxide emission, American Economic Review, 88, 669-685 (1998) |
| [15] | Koesrindartoto, D., 2004. Treasury auction, uniform or discriminatory? An agent-based approach, Economics Working Paper No. 04013, Department of Economics, Iowa State University.; Koesrindartoto, D., 2004. Treasury auction, uniform or discriminatory? An agent-based approach, Economics Working Paper No. 04013, Department of Economics, Iowa State University. |
| [16] | Koesrindartoto, D., Tesfatsion, L., 2004. Testing the reliability of FERC’s wholesale power market platform: an agent-based computational economics approach. In: Proceedings of the 24th USAEE/IAEE North American Conference, Washington, DC, USA.; Koesrindartoto, D., Tesfatsion, L., 2004. Testing the reliability of FERC’s wholesale power market platform: an agent-based computational economics approach. In: Proceedings of the 24th USAEE/IAEE North American Conference, Washington, DC, USA. |
| [17] | Oum, T., Concepts of price elasticities of transport demand, Journal of Transport Economics and Policy, 26, 139-154 (1999) |
| [18] | Ledyard, J.; Szakaly-Moore, K., Designing Organizations for Trading Pollution Rights. Mimeo (2004), California Institute of Technology: California Institute of Technology Pasadena |
| [19] | Mackie-Mason, J. K.; Varian, H. R., Pricing congestible network resources, IEEE Journal of Selected Areas in Communications, 13, 1141-1149 (1995) |
| [20] | Markose, S. M., Computability and evolutionary complexity: markets as complex adaptive systems (CAS), Economic Journal, 115, F159-F192 (2005) |
| [21] | Markose, S. M.; Sunder, S., Humans, Automatons and Markets: Computational Micro-Structure Design (2007), Cambridge University Press: Cambridge University Press Cambridge, (forthcoming) |
| [22] | Markose, S. M.; Alentorn, A.; Koesrindartoto, D., Robustness of the SMPRT Auction Design for Road User Pricing. Mimeo, CCFEA (2006), University of Essex: University of Essex Colchester |
| [23] | Markose, S.M., Alentorn, A., Koesrindartoto, A., Blythe, P., Ehlert, A., Grosso, S., Allen, P., 2006b. Intelligent charging, Smart Market Protocols for Road Transport (SMPRT), Final Report for IIS Foresight Project, ⟨http://www.foresight.gov.uk/Previous_Projects/Intelligent_Infrastructure_Systems/Index.htm; Markose, S.M., Alentorn, A., Koesrindartoto, A., Blythe, P., Ehlert, A., Grosso, S., Allen, P., 2006b. Intelligent charging, Smart Market Protocols for Road Transport (SMPRT), Final Report for IIS Foresight Project, ⟨http://www.foresight.gov.uk/Previous_Projects/Intelligent_Infrastructure_Systems/Index.htm |
| [24] | McCabe, K.; Rassenti, S.; Smith, V., Smart computer-assisted markets, Science, 254, 534-538 (1991) |
| [25] | Nash, C. A.; Sansom, T., Pricing European transport systems: recent developments and evidence from case studies, Journal of Transport Economics, 35, 3, 363-380 (2001) |
| [26] | Ove Arup and Partners International Limited and Scott Wilson Scotland Ltd in association with Marcial Echenique and Partners, Social Research Associates Ltd, November, 2002. Tyneside Area Multi-Modal Study, Study Report.; Ove Arup and Partners International Limited and Scott Wilson Scotland Ltd in association with Marcial Echenique and Partners, Social Research Associates Ltd, November, 2002. Tyneside Area Multi-Modal Study, Study Report. |
| [27] | Pigou, AC., Wealth and Welfare (1920), Macmillan: Macmillan London |
| [28] | Roth, E. A., The economist as engineer: game theory, experimentation, and computation as tools for design economics, Econometrica, 70, 1341-1378 (2002) · Zbl 1137.91339 |
| [29] | Schmalensee, R.; Joskow, P.; Ellerman, D.; Montero, J.; Bailey, E., An interim evaluation of sulfur dioxide emissions trading, Journal of Economic Perspectives, 12, 53-68 (1998) |
| [30] | Shaffer, B., Santos, G., 2005. Preliminary results of the London congestion charging scheme. Working Paper No. 04-3979, Department of Applied Economics, University of Cambridge, Cambridge.; Shaffer, B., Santos, G., 2005. Preliminary results of the London congestion charging scheme. Working Paper No. 04-3979, Department of Applied Economics, University of Cambridge, Cambridge. |
| [31] | Small, K. A.; Winston, C.; Yan, J., Uncovering the distribution of motorists’ preferences for travel time and reliability, Econometrica, 73, 4, 1367-1382 (2005) · Zbl 1151.62368 |
| [32] | Central London Congestion Charging Scheme: Three Months On (2003), Greater London Authority: Greater London Authority London |
| [33] | Varian, H., 1993. Intermediate Microeconomics, Third ed. Norton International Student Edition.; Varian, H., 1993. Intermediate Microeconomics, Third ed. Norton International Student Edition. |
| [34] | Vickery, W., Congestion theory and transport investment, The American Economic Review Proceedings, 59, 251-260 (1969) |
| [35] | Walters, A., The theory and measurement of private and social cost of highway congestion, Econometrica, 29, 676-699 (1961) |
This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. In some cases that data have been complemented/enhanced by data from zbMATH Open. This attempts to reflect the references listed in the original paper as accurately as possible without claiming completeness or a perfect matching.
