Competition between local authorities in the protection of sensitive areas

While there has been a lot of effort spent investigating road user charging in the literature, there has been much less research focusing on the implications of the institutional setting in the delivery of road user charging policies. This objective of this paper is to investigate the implications of interdependencies between the decision-making processes of institutions when using tolls as a device for the protection of sensitive areas. Left to their own devices, local authorities might be tempted to play a Nash game amongst themselves and set the tolls at a level that, whilst resulting in a positive outcome for the local area, might be detrimental for the entire network in terms of the net effect on welfare. More specifically, our case study considers cordon tolls applied to the protection of both the ecologically sensitive Peak District National Park and the populated urban city of Sheffield, two areas within the UK