open access publication

Article, 2024

Tradable credit schemes with peer-to-peer trading mechanisms

Transportation Research Part C Emerging Technologies, ISSN 0968-090X, 1879-2359, Volume 160, Page 104532, 10.1016/j.trc.2024.104532

Contributors

Liu, Renming 0000-0002-2863-086X (Corresponding author) [1] Wang, David Zhi-Wei 0000-0002-9623-6928 [2] Jiang, Yao 0000-0001-9461-633X [1] [3] Seshadri, Ravi 0000-0002-9327-9455 [1] Azevedo, Carlos Lima 0000-0003-3902-6569 [1]

Affiliations

  1. [1] Technical University of Denmark
    2. [NORA names: DTU Technical University of Denmark; University; Denmark; Europe, EU; Nordic; OECD];
  2. [2] Nanyang Technological University
    3. [NORA names: Singapore; Asia, South];
  3. [3] Lancaster University
    4. [NORA names: United Kingdom; Europe, Non-EU; OECD]

Abstract

Tradable credit schemes (TCS) have been receiving increasing attention as an alternative to congestion pricing due to considerations of equity and revenue neutrality. Although it is typically assumed that credit transactions occur between travelers directly, i.e., via peer-to-peer (P2P) trading, the underlying mechanism that achieves market clearing (in terms of matching of sellers and buyers and pricing of credits) has not been studied in sufficient detail. This study extends the current literature on TCS by proposing two types of P2P trading paradigms that define the rules of matching selling and buying orders, market price adjustment, and the individual bidding format. Together with a peer-to-regulator (P2R) design, all trading paradigms are tested in the context of the morning commute problem under a given distance-based time-of-day credit tariff scheme. Numerical results demonstrate that the proposed P2P trading paradigms – in the absence of transaction costs – lead to a near identical equilibrium in terms of social welfare gains, departure flows, and credit price as that obtained from P2R schemes. Further, the P2P trading mechanisms ensure budget neutrality of credits as well as revenue neutrality of the regulator during the day-to-day process.

Keywords

P2P, P2P trading mechanism, P2R, TCS, absence, absence of transaction costs, adjustment, alternative, alternative to congestion pricing, attention, bidding format, budget, budget neutrality, buy orders, clearing, commutation problem, congestion pricing, considerations, considerations of equity, context, cost, credit, credit price, credit schemes, credit transactions, day-to-day processes, departure, departure flow, design, equilibrium, equity, flow, formation, gain, i., identity equilibrium, increasing attention, literature, market, market clearing, market price adjustments, mechanism, morning, morning commute problem, neutralization, numerical results, order, paradigm, peer-to-peer, price, price adjustment, problem, process, regulation, results, revenue, revenue neutrality, rules, scheme, selling, social welfare gains, study, tariff, tariff scheme, tradable credit scheme, trade, trading mechanism, trading paradigm, transaction costs, transactions, travel, welfare gains

Funders

  • Ministry of Education

Data Provider: Digital Science

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