Micro-foundations of congestion and pricing: A game theory perspective

David Levinson

Research output: Contribution to journalArticlepeer-review

64 Scopus citations


This paper develops congestion theory and congestion pricing theory from its micro-foundations, the interaction of two or more vehicles. Using game theory, with a two-player game it is shown that the emergence of congestion depends on the players' relative valuations of early arrival, late arrival, and journey delay. Congestion pricing can be used as a cooperation mechanism to minimize total costs (if returned to the players). The analysis is then extended to the case of the three-player game, which illustrates congestion as a negative externality imposed on players who do not themselves contribute to it.

Original languageEnglish (US)
Pages (from-to)691-704
Number of pages14
JournalTransportation Research Part A: Policy and Practice
Issue number7-9
StatePublished - 2005
Externally publishedYes


  • Congestion
  • Congestion pricing
  • Game theory
  • Queueing
  • Road pricing
  • Traffic flow
  • Value pricing


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