Endogenous Scheduling Preferences and Congestion

31 Pages Posted: 30 May 2017

See all articles by Mogens Fosgerau

Mogens Fosgerau

University of Copenhagen

Kenneth A. Small

University of California, Irvine - Department of Economics

Date Written: May 2017

Abstract

We consider the timing of activities through a dynamic model of commuting with congestion, in which workers care solely about leisure and consumption. Implicit preferences for the timing of the commute form endogenously due to temporal agglomeration economies. Equilibrium exists uniquely and is indistinguishable from that of a generalized version of the classical Vickrey bottleneck model, based on exogenous trip‐timing preferences, but optimal policies differ: the Vickrey model will misstate the benefits of a capacity increase, it will underpredict the benefits of congestion pricing, and pricing may make people better off even without considering the use of revenues.

Suggested Citation

Fosgerau, Mogens and Small, Kenneth A., Endogenous Scheduling Preferences and Congestion (May 2017). International Economic Review, Vol. 58, Issue 2, pp. 585-615, 2017. Available at SSRN: https://ssrn.com/abstract=2976609 or http://dx.doi.org/10.1111/iere.12228

Mogens Fosgerau (Contact Author)

University of Copenhagen ( email )

University of Copenhagen, Building 26
Ă˜ster Farimagsgade 5
Copenhagen K., DK-1353
Denmark

Kenneth A. Small

University of California, Irvine - Department of Economics ( email )

3151 Social Science Plaza
Irvine, CA 92697-5100
United States
714-824-5658 (Phone)
714-824-2182 (Fax)

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