Traffic congestion: an experimental study of the Downs-Thomson paradox

This study considers a model of road congestion with average cost pricing. Subjects must choose between two routes—Road and Metro. The travel cost on the road is increasing in the number of commuters who choose this route, while the travel cost on the metro is decreasing in the number of its users. We examine how changes to the road capacity, the number of commuters, and the metro pricing scheme influence the commuters’ route-choice behavior. According to the Downs-Thomson paradox, improved road capacity increases travel times along both routes because it attracts more users to the road and away from the metro, thereby worsening both services. A change in route design generates two Nash equilibria; and the resulting coordination problem is amplified even further when the number of commuters is large. We find that, similar to other binary choice experiments with congestion effects, aggregate traffic flows are close to the equilibrium levels, but systematic individual differences persist over time. Copyright Economic Science Association 2014