Securitizing congestion: The congestion call option

Terry L. Friesz, Reetabrata Mookherjee, Tao Yao

Research output: Contribution to journalArticle

18 Scopus citations

Abstract

We introduce the idea of a European-type congestion call option to value commuting to work along a given path for a given departure time selected by automobile drivers who are modeled as Cournot-Nash non-cooperative agents competing for limited roadway capacity when the alternative of telecommuting exists. We show how to compute flow patterns based on congestion call options and contrast these to traditional user optimized flow patterns. In particular, a numerical example is presented that shows congestion options have the potential to lower the network-wide social costs of congestion.

Original languageEnglish (US)
Pages (from-to)407-437
Number of pages31
JournalTransportation Research Part B: Methodological
Volume42
Issue number5
DOIs
StatePublished - Jun 2008

All Science Journal Classification (ASJC) codes

  • Civil and Structural Engineering
  • Transportation

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