Managing bottleneck congestion with incentives

Abstract Incentive-Based Traffic Demand Management (IBTDM) is a strategy that adopts incentives to demotivate driving trips, or to redistribute demand across space and time. In this paper, we demonstrate the effectiveness of an IBTDM strategy that provides incentives to shift the commuting public's departure times so that the queueing delay is reduced. Based on Vickrey's bottleneck model, this paper considers the impact of incentive budget and market penetration rate on the optimal incentive profile for both homogeneous and heterogeneous commuters. The resulting departure pattern created by the optimal incentive profile achieves Pareto Optimality. The results indicate that an optimal incentive profile is “U-shape” during the morning peak with a limited budget. Additionally, we find that the marginal benefit of incentive is diminishing. Lastly, although Pareto improvement is achieved, commuters with higher values of time are found to benefit more under the optimal incentive design. It is also discovered that the incentive provider should promote IBTDM to the two ends of the income level of the commuters to achieve the lowest total system travel time under an insufficient marketing budget.