Tradable credit schemes for managing bottleneck congestion and modal split with heterogeneous users

•A tradable credit scheme is proposed for managing both bottleneck congestion and mode choice.•The scheme emulates an integrated and revenue-neutral transport pricing and subsidy policy.•User heterogeneity with a continuously distributed value of travel delay is considered.

This paper examines the efficiency of a tradable travel credit scheme for managing bottleneck congestion and modal split in a competitive highway/transit network with continuous heterogeneity in the individuals’ value of time. Each user is initially endowed with a certain amount of travel credits and can sell or buy additional credits in a free trading market. Time-dependent credit charge is implemented only for usage of the road bottleneck. We show that both the modal split and credit charge at equilibrium are unique, and the scheme is always Pareto-improving when the system optimum is achieved.