Dynamic traffic congestion pricing mechanism with User-Centric considerations

We consider the problem of designing real-time traffic routing systems in urban areas. Optimal dynamic routing for multiple passengers is known to be computationally hard due to its combinatorial nature. To overcome this difficulty, we propose a novel mechanism called User-Centric Dynamic Pricing (UCDP) based on recent advances in algorithmic mechanism design. The mechanism allows for congestion-free traffic in general road networks with heterogeneous users, while satisfying each user´s travel preference. The mechanism first informs whether a passenger should use public transportation or the road network. In the latter case, a passenger reports his maximum accepted travel time with a lower bound announced publicly by the road authority. The mechanism then assigns the passenger a path that matches with his preference given the current traffic condition in the network. The proposed mechanism introduces a fairness constrained shortest path (FCSP) problem with a special structure, thus enabling polynomial time computation of path allocation that maximizes the sequential social surplus and guarantees fairness among passengers. The tolls of paths are then computed according to marginal cost payments. We show that reporting true preference is a weakly dominant strategy. The superior performance of the proposed mechanism is demonstrated on several simulated routing experiments in comparison to user equilibrium and system optimum.