Solving the toll design problem with multiple user groups

Congestion pricing has been regarded as an efficient method to reduce network-wide travel cost. In this study, a methodology for toll design is developed to provide policy-makers with suggestions on both where to charge tolls and how much the tolls should be. As opposed to the traditional approach of marginal social cost pricing, this methodology is capable of dealing with the more realistic case, in which only a small number of links can be tolled. Furthermore, this methodology can accommodate multiple user groups. Specifically, we make several simplifying assumptions which enable us to convert a traditional bilevel formulation of the toll design problem into a single level, standard nonlinear optimization problem.