The social welfare gain and investment return are two main concerns of a road investment project, and they are usually key components of a Build-operate-transfer (BOT) contract. Therefore, the Pareto efficient outcomes of the two objectives are attractive for both government and private investor. This paper proposes a ex-post toll adjustment procedure called Paretoimproving trial-and-error procedure (PI-TEP), in order to achieve the Pareto efficient outcomes for a BOT toll road project with pre-determined road capacity and unknown demand function. The PI-TEP is novel and Pareto-improving, since the procedure does not require an analytical demand function and can improve social welfare and revenue simultaneously. Furthermore, the PI-TEP is theoretically proved to be efficient in obtaining the Pareto efficient outcomes. And thus, the procedure is practically useful and valuable for both government and private investor in a BOT toll road project.


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    Title :

    Pareto-improving toll adjustment for a buildoperate-transfer toll road project with unknown demand


    Contributors:
    Zhijia Tan (author) / Wei Tan (author)


    Publication date :

    2014




    Type of media :

    Article (Journal)


    Type of material :

    Electronic Resource


    Language :

    Unknown




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