federal government tries to force local governments to implement welfare optimal tolling and investment. Welfare optimal tolling requires charging for marginal external costs. Local governments have an incentive to charge more than the marginal social cost whenever there is transit traffic. We analyse the pricing and investment issue in an asymmetric information setting where the local governments have better information than the federal government. The case of air pollution and of congestion are discussed. ispartof: CES - Discussion paper series DPS11.19 pages:1-33 status: published
The different versions of the original document can be found in:
DOIS: 10.2139/ssrn.1934137 10.2139/ssrn.1934136
Published on 01/01/2011
Volume 2011, 2011
DOI: 10.2139/ssrn.1934137
Licence: CC BY-NC-SA license
Are you one of the authors of this document?