An Economic Analysis Of Network Deployment And Application To Road Pricing

This paper develops an economic framework for developing strategies necessary to deploy networks, and applies the framework to the deployment of road pricing. The cost structure of highways are discussed. A graphical method for measuring welfare with road pricing is presented. The relationship of space and financing mechanism is reviewed. A network model of the economy is presented. This is followed by a discussion of network externalities, and how those relate to both the deployment and emergence of technologies. Finally, the deployment of three main elements relating to road pricing: use of electronic toll collection on existing toll roads, construction of new toll roads, and conversion of existing untolled road to toll roads are discussed. Key Words: Road Pricing - Deployment, Congestion Pricing, Toll Roads, Turnpikes, Network Financing