The use of mechanisms in transport.

Transport is the generator of many detrimental effects - externalities. There are externalities that influence non-transport sectors (noise, accidents, air pollution etc.), and externalities that influence only the participants in the transport system (congestion). Because of these externalities, the transport system is not being used at its efficient level, where no more gains can be derived without the negative side-effects being even larger. The reason for this is that individuals do not take into account the detrimental effects they are causing when they make their choice of transport. The approach taken in this paper has its origin in Implementation theory, which has been developed during the past 30 years. Hurwich (1994) gives an overview of the development, and Corchon (1996) covers the principal theoretical elements. The aim of this theory is to implement socially desirable decisions. This can be translated into a transport setting as the implementation of the most efficient use of the transport system, taking into account all effects (direct, indirect, detrimental etc.). For specific purposes special game forms (called Mechanisms) are designed. A mechanism consists of a set of rules (of the game) and a set of players. The mechanisms are designed so that the individually preferred strategy is such that the outcome corresponds to the alternative(s) desired by society (a social planner), here this is interpreted as efficient use of the existing transport infrastructure. However, not many real applications have seen the light of day, most contributions have been of the theoretical kind. In this paper the theoretical contributions are taken a step further. Focus is on a very specific task - namely the internalisation of transport externalities. To make things as simple as possible, attention is limited to the problem of internalising congestion. There is nothing in the theoretical set-up that prevents a general use of the proposals on all kinds of externalities, the restriction to congestion is only used to make the exposition simpler. In another paper, Kveiborg (2001a) discusses the theoretical set-up of the proposals. In the present paper, the focus is upon the more practical parts.