Information Provision in Road Transport with Elastic Demand A Welfare EconomieApproach

1. Introduetion Congestionseverelyaffectsmostmetropolitan areasaroundthe world. Numerous instruments to tackle congestionhave been studied in the past: electronic road pricing, fuel taxation, regulatory parking policies, improving public transport, and so on. Another instrument,widelyviewedto be ableto relievepartof the congestionproblem,is the use ofnew informationtechnologies in transport networks (theDRIVEland II programmes ofthe EuropeanCommunity andtheIntelligent Vehicle Highway Systems(IVHS)efforts in theUnitedStatesareexamples). Informationprovisiontodriversis believedtoimprove theirknowledgeofthe trafficsituationontheroadsandthusto improvedrivers' decisionmaking (Ben-Akivaet al., 1991; Bonsall. 1992). Unfortunately, the real picture of the effects of information provision to drivers is less clear than such intuitive reasoning suggests.Atanaggregatelevel,theimproveddecision-making mightimplythatinformation will direct traffic flows to the user equilibrium (Emmerinket al., 1995a;Wardrop, 1952),in otherwords,a situationcharacterised bydriveroptimaldecisions. However,the inequality between Wardrop's first (user equilibrium) and second (system optimum) principles in congestedsituations (Sheffi, 1985) indicates that informationprovided to drivers need not direct the traffic flows towards the system optimum, that is, the most effective use of the transport network. This potential discrepancy arises because of the existenceofthe congestionexternality. This observation leaves the interesting(and still open) question: to what extent is Information able to improve network efficiency, and hence to diminish the externalcosts causedby trafficcongestion? In the literature,sparseattention has beenpaidto thisquestion. Mostpapersuseeither a simulation approach to infer conclusions on networkefficiency (El Sanhouri, 1994; Emmerinket al., 1995b; Mahmassani and Jayakrishnan, 1991)or an empiricaI analysis