This paper provides a link between car following theory and the economic theory of road congestion by means of a theory of speed choice. According to this theory speed choice is based on a trade-off between the benefits (shorter travel time) and cost (higher accident risk) of driving faster. Accident risk is related to the distance to the ‘leader’ and by elaborating this relationship a number of car-following models can be derived from this theory of speed choice. Wit homogeneous traffic, steady state analysis leads to a model that generalizes the conventional Pigou-Knight analysis: it has an endogenous speed choice curve and requires the incorporation of accident risk in the value of travel time. A further generalization of this model to steady states with heterogeneous traffic is possible and leads to the conclusion that first best tolls will in general require differentiation over groups of drivers. Finally a general bottleneck model is discussed that contains Vickrey’s (1969) and Verhoef’s (2002) versions as special cases. This results in a clarification of Verhoef’s finding that implementation of the optimal Vickrey toll can result in a deterioration of welfare. (Author/publisher)
Abstract