CONGESTION PRICING AND CONGESTION SECURITY

Historically, congestion pricing is considered as an efficient pricing mechanism to decrease total social cost by eliminating rush hour congestion. However, in order to eliminate rush hour congestion, deterministic settings are usually necessary. In recent research, even if some uncertain sources are introduced, congestion price under uncertainty is still not clear addressed. In this thesis, I brief the literature of congestion pricing for deterministic cases, discuss the traditional sources of uncertainty in literature, and introduce the possible source of uncertainty for congestion pricing. Base on those congestion pricing uncertainties, I analytically show how the road congestion and total social cost will be influenced. Also, congestion option is introduced as a market-based treatment to deal with uncertainty to reduce the total social cost. Furthermore, this thesis analytically shows that the congestion option can be used to reduce total social cost by altering commuters departure behavior and reducing commuters risk. At last, numerical formulations are given to justify the robustness of our results respect to more general congestion uncertainty.