, Volume 45, Issue 2, pp 597–622 | Cite as

Reducing traffic externalities by multiple-cordon pricing

  • Jyh-Fa Tsai
  • Shao-Yu Lu


The second-best congestion pricing schemes including common optimum, one cordon, and multiple cordons schemes are compared with the first-best optimum pricing scheme. A cross-subsidy effect exists in these second-best pricing models. However, the scheme with more cordons will diminish the cross-subsidy and approach an efficient and equitable outcome. The relative efficiency of a cordon pricing scheme for the case of Taipei metropolis is very high. One single cordon yields excellent performance of 93% relative efficiency. There might be some factors causing the good results: the uncongested traffic condition, the linear unit distance cost in traffic flow forming a nonlinear cost function, and the trip demands with continuous space and the same destination (the central business district) in the network.


Multiple-cordon pricing Second-best congestion pricing Traffic congestion externality Social surplus 



The authors wish to thank the Editor and the anonymous referees for very helpful comments in the paper revision.


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Copyright information

© Springer Science+Business Media New York 2016

Authors and Affiliations

  1. 1.Graduate Institute of Urban PlanningNational Taipei UniversityNew Taipei CityTaiwan
  2. 2.CCIS Real Estate Joint Appraisers FirmTaipeiTaiwan

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