Abstract
The authors propose PEXIC (Priced EXchanges in Intersection Control), a new concept and algorithm for traffic signal control that incorporates user heterogeneity on value of delay savings. The algorithm assigns phases with associated delays, taking into account the vehicle travelersâ?? values for experienced delay. Applying principles of envy-freeness, the authors develop a pricing scheme that addresses fairness by minimizing user envy via compensatory monetary transfers among users. PEXIC is Pareto efficient and budget balanced, and thus financially self-sustainable without external subsidy. The optimization is solved sequentially on a rolling horizon basis: first the phasing, and next the pricing. PEXIC achieves significant cost reductions for a large range of volumes and usersâ?? value heterogeneity levels. Inclusion of user heterogeneity also proved to be fairer than standard delay minimization that disregards individual vehiclesâ?? values for delay savings. Furthermore, the authors show that arbitrage is not possible, thus there are no incentives to drive just to collect those payments. The method used has polynomial complexity and it is suitable for real-world implementation.