The exchange value embedded in a transport system (Q607562)

A transport system is used to move goods from sources to targets. In building such a system, the aim is usually the minimisation of the total transportation cost. This paper, however, shows that a well designed transport system has also an embedded exchange value by serving as a market for potential exchange between consumers. Under suitable conditions, one can improve the welfare of consumers in the system simply by allowing some exchange of goods between consumers during transportation without incurring additional transportation cost. The paper proposes an explicit valuation formula to measure this exchange value for a given compatible transport system. The exchange value is defined by solving a maximisation problem that has a unique solution under suitable conditions, which are defined by a reasonable combination of criteria based on transport structures, preferences and prices. This combination guarantees the existence of a positive exchange value, and is used to determine it. Finally, the paper studies a new optimal transport problem with an objective, which takes into account both the transportation cost and the exchange value.