Carpooling and congestion pricing in a multilane highway with high-occupancy-vehicle lanes

High-occupancy-vehicle (HOV) lanes and toll differentiation have been used as efficient measures to address growing traffic congestion problems by providing priority treatment for buses and carpools. This paper deals with carpooling behavior and optimal congestion pricing in a multilane highway with or without HOV lanes. It is shown that in the absence of HOV lanes, a uniform toll for all vehicles (independent of their number of occupants) should be charged to achieve a first-best social optimum. However, in the presence of HOV lanes, first-best pricing for a social optimum requires differentiating the toll per vehicle across segregated lanes. In the case where toll differentiation cannot be applied, the optimal uniform toll for the second-best solution in the presence of HOV lanes should be set to be a weighted average of the marginal external congestion costs between non-carpooling and carpooling commuters. Our theoretical observations have strong practical implications for combined implementation of HOV lanes and congestion pricing. (C) 1998 Elsevier Science Ltd, All rights reserved.