Advertisement

The Efficiency of Optimal Taxes

  • George Karakostas
  • Stavros G. Kolliopoulos
Part of the Lecture Notes in Computer Science book series (LNCS, volume 3405)

Abstract

It is well known that the selfish behavior of users in a network can be regulated through the imposition of the so-called optimal taxes on the network edges. Any traffic equilibrium reached by the selfish users who are conscious of both the travel latencies and the taxes will minimize the social cost, i.e., will minimize the total latency.

Optimal taxes incur desirable behavior from the society point of view but they cause disutility to the network users since the users’ total cost is in general increased [4]. Excessive disutility due to taxation may be undesirable from the societal perspective as well. In this work we examine the efficiency of taxation as a mechanism for achieving the desired goal of minimizing the social cost. We show that for large classes of latency functions the total disutility due to taxation that is caused to the users and/or the system is bounded with respect to the social optimum. In addition, we show that if the social cost takes into account both the total latency and the total taxation in the network, the coordination ratio for certain latency functions is better than the coordination ratio when taxation is not used.

Keywords

Social Cost Latency Function Optimal Taxis Social Optimum Path Cost 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. 1.
    Aashtiani, H.Z., Magnanti, T.L.: Equilibria on a congested transportation network. SIAM Journal of Algebraic and Discrete Methods 2, 213–226 (1981)zbMATHCrossRefMathSciNetGoogle Scholar
  2. 2.
    Beckmann, M., McGuire, C.B., Winsten, C.B.: Studies in the Economics of Transportation. Yale University Press, New Haven (1956)Google Scholar
  3. 3.
    Christodoulou, G., Koutsoupias, E., Nanavati, A.: Coordination mechanisms. In: Díaz, J., Karhumäki, J., Lepistö, A., Sannella, D. (eds.) ICALP 2004. LNCS, vol. 3142, pp. 345–357. Springer, Heidelberg (2004)CrossRefGoogle Scholar
  4. 4.
    Cole, R., Dodis, Y., Roughgarden, T.: How much can taxes help selfish routing? In: Proceedings of the 4th ACM Conference on Electronic Commerce, pp. 98–107 (2003)Google Scholar
  5. 5.
    Cole, R., Dodis, Y., Roughgarden, T.: Pricing network edges for heterogeneous selfish users. In: Proceedings of the 35th Annual ACM Symposium on Theory of Computing, pp. 521–530 (2003)Google Scholar
  6. 6.
    Correa, J.R., Schulz, A.S., Stier Moses, N.E.: Selfish routing in capacitated networks. Technical Report Working Paper 4319-03, MIT Sloan School of Management, Cambridge, MA (June 2003)Google Scholar
  7. 7.
    Correa, J.R., Schulz, A.S., Stier Moses, N.E.: Selfish routing in capacitated networks. To appear in Mathematics of Operations Research (February 2004)Google Scholar
  8. 8.
    Dafermos, S., Sparrow, F.T.: The traffic assignment problem for a general network. Journal of Research of the National Bureau of Standards, Series B 73B, 91–118 (1969)MathSciNetGoogle Scholar
  9. 9.
    Fleischer, L., Jain, K., Mahdian, M.: Taxes for heterogeneous selfish users in a multicommodity network. To appear in Proceedings of the 45th Annual IEEE Symposium on Foundations of Computer Science (2004)Google Scholar
  10. 10.
    Hardy, G., Littlewood, J.E., Pólya, G.: Inequalities, 2nd edn., Cambridge (1934)Google Scholar
  11. 11.
    Karakostas, G., Kolliopoulos, S.G.: Edge pricing of multicommodity networks for heteregoneous selfish users. To appear in Proceedings of the 45th Annual IEEE Symposium on Foundations of Computer Science (2004)Google Scholar
  12. 12.
    Koutsoupias, E., Papadimitriou, C.: Worst-case equilibria. In: Proceedings of the 16th Annual Symposium on Theoretical Aspects of Computer Science, pp. 404–413 (1999)Google Scholar
  13. 13.
    Osborne, M.J., Rubinstein, A.: A course in Game Theory. The MIT Press, Cambridge (1994)zbMATHGoogle Scholar
  14. 14.
    Roughgarden, T., Tardos, É.: How bad is selfish routing? Journal of the ACM 49, 236–259 (2002)CrossRefMathSciNetGoogle Scholar
  15. 15.
    Smith, M.J.: The marginal cost taxation of a transportation network. Transportation Research 13B, 237–242 (1979)Google Scholar
  16. 16.
    Wardrop, J.G.: Some theoretical aspects of road traffic research. In: Proc. Inst. Civil Engineers, Part II, vol. 1, pp. 325–378 (1952)Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2005

Authors and Affiliations

  • George Karakostas
    • 1
  • Stavros G. Kolliopoulos
    • 2
  1. 1.Department of Computing and SoftwareMcMaster University 
  2. 2.Department of Informatics and TelecommunicationsUniversity of Athens and Department of Computing and Software, McMaster University 

Personalised recommendations