Abstract
Morning commuters congest central business district roadways as they search for parking. A survey of studies suggests that on average 30% of downtown congestion is attributed to drivers searching for parking. This imposes great commuting costs. Drivers may behave in a more socially-optimal manner if parking spots were priced in such a way as to internalize the congestion externality or if a driver were made more aware of the parking congestion prior to selecting a parking destination. If efficiency in parking were improved through policy, there would be the added benefit from declines in fuel consumption, and associated negative environmental effects, as well as less traveled roadways, decreasing both accidents and annual maintenance. Vickrey (1971) was first to propose a responsive price policy to address urban traffic congestion. Drivers could coordinate their actions to reduce congestion and maximize efficiency through full information and a responsive pricing mechanism. With today's technology it may be possible to provide real time information to drivers at a reasonable cost. This thesis uses a laboratory experiment to determine the extent to which responsive pricing improves efficiency and coordination over a fixed parking price system. It also seeks to find whether the effect differs when drivers know the real-time parking price. No clear consensus has emerged on the ability of responsive pricing to improve parking efficiency or that providing agents with information about congestion and prices improves coordination or efficiency. This thesis explicitly examines the differences of subject and group welfare and the ability to coordinate between a responsive price and a fixed price system with and without specific price information. Welfare and coordination were measured by the subject's earnings and their decisions of where and when to park in the different market settings. The experiment results show that the availability of pricing information and not the type of pricing has a statistically significant impact on the level of coordination, yet the reduction does not translate into an improvement in total welfare. No treatment effects on total net commuter earnings were statistically different across treatments for the total group of commuters or by group of the two commuter types, but statistical significant differences did occur for gross earnings. The treatment effects on gross earnings occurred only at the individual level and the improvement in gross earnings depended on the type of commuter. The commuter that had a greater willingness to pay to park in the central business district compared to the other type of commuter earned significantly more gross earnings, on average, in the full information responsive price treatment than the same type of commuter in the other treatments. The level of coordination did not reach the optimal level for any of the treatments, but the full information treatments did have a greater degree of coordination. These results suggest that transportation researchers looking to reduce downtown congestion should focus more on providing information to commuters on current congestion levels rather than finding the right price for parking.