Congestion Pricing: Economics, Theory, Reality | web3 with a16z crypto Everyone hates traffic. One way to reduce it is through congestion pricing, which New York City implemented at the start of the year — a first of its kind for the U.S. We spoke to two economists about...

A podcast episode with @skominers.bsky.social and @rhhackett on #congestionpricing in New York City (and beyond). Link: web3-with-a16z.simplecast.com/episodes/con...

The New York City congestion pricing lawsuit. Very much worth following. Real-time updates at www.courtlistener.com/docket/69652...

Here is the only tip you need. You are welcome.

You can remove "during the impending collapse of the federal government/American society" from your statement.

Hasn’t Mirrlees already written this paper? Zero marginal tax rate at the top?

Finance too:

Looking forward to reading it when you’re done!

"You suddenly knock out a random set of the relationships (contracts) and nodes (companies) in a large and very complex network."

Ooooh, exogenous random shock!

Slides for the earliest of these papers are available at web.stanford.edu/~ost/papers/...

Two earlier, purely theoretical papers on the topic:
web.stanford.edu/~ost/papers/...
web.stanford.edu/~ost/papers/...

Shameless self-promotion: I think congestion pricing is one of the most exciting and promising topics in the near future in the area of "Engineering Societal Systems". My most recent paper on the topic is here: web.stanford.edu/~ost/papers/..., see also this thread: bsky.app/profile/most....

Working Group Report: Market Design

NBER Market Design Working Group Report, talking about many exciting recent papers in all areas of market design/design of economic mechanisms. www.nber.org/reporter/202...

And how do ChatGPT/Claude do on your exams? That’s the real challenge if you do take-home exams or let students use computers.

Market Design Working Group Meeting, Fall 2024

A whole bunch here: www.nber.org/conferences/...

New Dean at Stanford GSB!

Prices are great and should be left alone

(If the evidence for those CA specs is so compelling, how come our neighbors don’t adopt them?)

Cost-benefit - I admit I don’t know much about this particular case, but if it’s good enough for the remaining 49 states, it should be fine for CA too. There is a clear, massive distortion in the market - let’s eliminate it unless the evidence for it is mega-compelling. Which I suspect it isn’t.

I do think there must be a competition problem, but it is only there because of those extra specs which make the market much more restricted and thus easier to “coordinate” prices. More potential (or actual) entry would solve it.

Remove those CA clean-air specs. Have the same requirements as the neighbors. Obvious first step.

📌

Easy fix - allow gasoline from Nevada and Oregon. Totally an own goal by CA.

If Bill Gates was born in the Soviet Union, he would have probably ended up as a successful research mathematician or physicist.

This rings true to me. One of the reasons why the Soviet Union was so strong in math and physics is that super-talented people in those areas didn't have nearly as many outside options to apply their talents as did comparably talented people in the United States.

It is addressing *some* congestion (bridges and tunnels), which is not nothing. But there is more congestion to address, by charging appropriate tolls to taxis, FHVs, and delivery vehicles.

Make Theory Great Again

Of course. But in this particular case, we can make useful (if still tentative) takeaways even from just three days of data. More time will generate more takeaways.

In the paper, we work out the specific numbers, and also discuss the related issue of delivery services. Having said all this, the current plan is an amazing first step in the right direction - congratulations to all the policymakers for the incredible work they put into making this happen!

The current plan charges a high amount per trip to regular cars, while charging little to the passengers of taxis and FHVs. So in the areas where the latter type of traffic is predominant, the plan is ineffective. Fortunately, this suggests a straightforward fix - charge more to taxis and FHVs.

Why does this difference in composition matter, and why does it explain the difference in the effectiveness of the congestion pricing plan in the different areas (and the difference between the effects in the two screenshots)? The answer is in my paper with Frank: web.stanford.edu/~ost/papers/...