Agent-Based Model of Price Competition, Capacity Choice, and Product Differentiation on Congested Networks
Journal of Transport Economics and Policy, Vol. 42, No. 3, pp. 435-461, September 2008
27 Pages Posted: 7 Jan 2011 Last revised: 7 Sep 2014
Date Written: August 1, 2008
Using consistent agent-based techniques, this research explores the welfare consequences of product differentiation on congested networks. The economic analysis focuses on the source, evolution, measurement, and impact of product differentiation with heterogeneous users on a mixed ownership network. Path differentiation and space differentiation are defined and measured for a base scenario and several variants. The findings favour a fixed-rate road pricing policy compared to complete pricing freedom on toll roads. It is also shown that the impact of production differentiation on welfare is not always positive and depends on the level of user heterogeneity.
Keywords: agent-based, welfare, networks, congestion, transportation, path differentiation
JEL Classification: R40, R41, C00
Suggested Citation: Suggested Citation