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Game Theory & the City



In class we learned about game theory and Nash equilibrium in the context of traffic and transportation networks in order to understand the decisions that drivers make in the face of congestion. American metropolises as we know today have been shaped by the automobile industry for the automobile, and thus are riddled with problems of congestion for the millions of commuters and city inhabitants who participate in the urban economy. According to the NY Post in 2016, the traffic is being engineered, through the introduction of bike lanes and narrower street lanes, to slow down traffic in order to turn public favor against the automobile and toward shorter commute transportation modes such as the subway, walking, and biking. However, as we learned through Braess’s Paradox, adding resources, such as expanding car lanes or creating new, faster highways, to a transportation network can sometimes hurt performance at equilibrium. Thus, contrary to auto advocates, the congestion may not be due to a lack of physical infrastructure but rather the phenomenon described by Braess’s Paradox.


This article describes New York City’s attempt to implement a policy that will utilize congestion pricing, where drivers must pay a small fee to use urban roads during peak hours, in order to reduce the traffic on roads. Thus, congestion pricing is an attempt to engineer a socially optimal traffic network by controlling x, the number of cars that traverse the edges in the travel-time function Te(x). By utilizing congestion pricing, policy makers and traffic engineers present a new game for commuters, choosing between getting in a car and paying the fee to drive to and from work, or taking other forms of public transit. In order to balance out the incentives as to create the traffic flow that  has the least amount of social cost, the city is proposing a new program called Move NY that employs cheaper bus rates, express buses otherwise called bus rapid transit, and expanded bus lines in order to make public transit look more attractive to commuters. In this example the city government is manipulating the game in order to move their city toward a less car-centric, more livable and sustainable place.


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