Race to the top in traffic calming

We study the competition of two suburbs that are facing transit traffic flows. We show that in the absence of toll measures, the Nash equilibrium leads to a race to the top in traffic calming, except for the measures that do not affect the generalized cost of traffic. The Nash equilibrium is compared to two types of centralized decisions: the symmetric solution and the asymmetric solution. It is shown how the asymmetric solution that concentrates all transit traffic in one suburb is better but can only be realized if the authority over the local roads is transferred to the central authority.