Hacker News Reader

Comment by zhoujianfu | Hacker News Reader

Wouldn’t the best way to do congestion pricing be to simply optimize for maximum revenue (which you then mostly redistribute either equally or progressively)?

I feel like the way to maximize revenue would just be to try either raising or lowering the price (by say 20%?) every n (5-10?) minutes, and see if your revenue goes up or down. If it goes up, continue what you’re doing, and if it goes down, reverse it?

View on HN

Revenue maximisation in this case is not a great goal. The idea behind congestion pricing is to price-ration road-usage so that people make socially optimal use of roads (which in theory is achieved by setting prices at marginal social cost). Pricing should vary in line with road congestion so that people respond by altering their road usage patterns (e.g. shifting working hours so their commute is outside of peak times, make road deliveries in non-peak hours etc.)

If you go for revenue maximisation you won't be setting prices at the social welfare maximising level. Also, you'd probably want to charge higher prices for heavier vehicles as they cause more road damage per unit of distance travelled.

> (which in theory is achieved by setting prices at marginal social cost).

This sounds really clever but I don't get it. Do you have a link to a more thorough explanation?

People can’t change what they’re doing that fast - you’d have to do it over weeks or months.

The goal is to tip the balance from “30 min drive vs 1 hour transit” to “30 min drive + 10€ vs 1 hour transit” and if the equation keeps changing people will feel trapped.

What if maximizing revenue doesn’t relieve congestion? Raising money is not a goal of congestion pricing.

Reply on news.ycombinator.com