Managing network congestion with a trip- and area-based tradable credit scheme

This study proposes a trip- and area-based tradable credit scheme (TCS) for congestion management in the context of the morning commute problem using a trip-based Macroscopic Fundamental Diagram model with heterogenous travelers. In our proposed TCS, the regulator distributes credits to all travelers and designs a time-varying and trip-based credit tariff. Credits are traded between travelers and the regulator via a credit market at the price determined by credit demand and supply interactions. The TCS is incorporated into a day-to-day modeling framework to examine travelers’ learning process, network state evolution, and credit market properties. The conditions for existence of an equilibrium solution and uniqueness of the equilibrium credit price are established analytically. Simulation results validate the analytical properties, demonstrate that the proposed TCS yields identical social welfare as the congestion pricing while maintaining revenue neutrality, and show the superiority of a trip-based TCS to (trip agnostic) area-based TCS.