How a fast lane may replace a congestion toll

This paper considers a congested bottleneck. A fast lane reserves a more than proportional share of capacity to a designated group of travellers. Travellers are otherwise identical and other travellers can use the reserved capacity when it would otherwise be idle. The paper shows that such a fast lane is always Pareto improving under Nash equilibrium in arrival times at the bottleneck and inelastic demand.

It can replicate the arrival schedule and queueing outcomes of a toll that optimally charges a constant toll during part of the demand peak. Within some bounds, the fast lane scheme is still welfare improving when demand is elastic.