Journal Article

Evolutionary Implementation and Congestion Pricing

William H. Sandholm

in The Review of Economic Studies

Published on behalf of Review of Economic Studies Ltd

Volume 69, issue 3, pages 667-689
Published in print July 2002 | ISSN: 0034-6527
Published online July 2002 | e-ISSN: 1467-937X | DOI: http://dx.doi.org/10.1111/1467-937X.t01-1-00026
Evolutionary Implementation and Congestion Pricing

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We consider an implementation problem faced by a planner who manages a roadway network. The problem entails both hidden information and hidden actions. We solve the planner's problem by introducing a new class of mechanisms and a new notion of implementation. The mechanisms, called price schemes, attach transfers to the available routes; they do not involve direct revelation. The method of implementation is evolutionary, requiring that players who follow any reasonable myopic adjustment process eventually learn to behave as the planner desires. We show that efficient behaviour can be guaranteed using simple, decentralized price schemes.

Keywords: D82; R48

Journal Article.  0 words. 

Subjects: Information, Knowledge, and Uncertainy ; Transportation Systems

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