Managing morning commute congestion with a tradable credit scheme under commuter heterogeneity and market loss aversion behavior

This study investigates the impact of a tradable credit scheme (TCS) on managing morning commute congestion by considering commuters’ value-of-time and schedule delay heterogeneities, and loss aversion behavior in purchasing credits. It illustrates that total value of traded credits and credit price approach zero as commuters’ loss sensitivity increases. Further, the initial credit allocation method can impact the credit price and commuters’ departure rate. The study insights show that if commuters’ loss sensitivity is not considered, the system-optimal TCS design can lead to a less effective scheme to minimize the total system travel cost.