Simultaneous Congestion-Pricing and Information Provision

Chapters 2 and 3 discussed two main classes of instruments for congestion regulation: (1; Chapter 3) the traditional congestion tolls, essentially based on the works of Pigou (1920) and Knight (1924), and (2; Chapter 2) modern telematics solutions, using relatively new, user-oriented information technologies, Chapter 2. These two types of instruments are generally analysed in isolation. However, they do in fact bear a close similarity. As first-best congestion charges depend on the actual level of congestion, they clearly contain quite some information, and even imply perfect information provided road users are perfectly aware of their private costs. At the same time, fluctuating congestion tolling without proper pre-trip and on-route information provision is likely to have only a limited impact on user behaviour, as many choices (mode choice, departure time, route choice) will then be based on expected rather than actual tolls and congestion levels. In addition, such information provision to a considerable extent determines the social acceptability of fluctuating road pricing (imagine the emotions of a commuter not only ending up in unexpectedly severe congestion, but facing an unexpectedly high toll on top of that…). As is the case for any market, efficient pricing of road usage only yields its desired optimal effects if individual choices are based on perfect knowledge of the prevailing price and quality of the good to be purchased.