Incentivizing Responsible Commuting
Without a doubt, one of the biggest problems with road transportation today is traffic. It is a vast contributor to our ongoing environmental problems and it results in the loss of billions of dollars worth of fuel each year. And it’s also a big waste of time for commuters! Balaji Prabhakar, an Electrical Engineering and Computer Science professor at Stanford University, discusses the issue and proposes a potential solution. In this video, he focuses on traffic jams that are caused as a result of commuters going to work during morning rush hour. The problem here is simple. Everyone is traveling around the same time, causing massive delays. Clearly, it would be better if fewer people left for work around the same time, but the incentive to leave earlier just isn’t strong enough. Seeing this, Professor Prabhakar proposes an idea to reward commuters who leave for work earlier in the morning. The reward comes in the form of credits that can be used in weekly raffles for monetary prizes. In this system, credits are gained by arriving to work before a certain time. Depending on the number of credits one has, one can increase his or her probability of winning and become eligible to win larger prizes. Additionally, credit holders who don’t win a raffle one week get to keep some of their credits and use them the following week.
Professor Prabhakar and his Stanford team established the INSTANT (Infosys-Stanford Traffic) Project in order to test this strategy. The project took place in Bangalore, India, a city notable for its severe traffic problems, and ran from October 2008 to April 2009. Around 14,000 commuters participated in the experiment. The results showed that the strategy was considerably effective. On average, 7:15 a.m. commutes were found to be at least 30 minutes faster than 8:15 a.m. commutes. About 1,900 employees won at least one raffle, and the average prize money per winner was about Rs. 1,400 ($28). Total savings in fuel cost amounted to around Rs. 20,000 ($400) per day. More widespread use of this strategy could significantly reduce the time needed and fuel cost for rush hour commutes.
This experiment illustrates a real world application of the game theory we’ve been learning in class. Commuters’ decisions regarding when to leave for work can be modeled as a game with different payoffs depending on what time they leave. Without the INSTANT Project’s incentive program, the payoff for leaving later might be higher than the payoff for leaving earlier, as the benefits of sleeping in, having time to eat breakfast, etc. could outweigh the benefits of avoiding traffic. With the added incentive program, the payoff for leaving earlier rises enough so that a significant number of commuters choose to leave before rush hour traffic hits. Of course, if more and more commuters start to leave earlier, rush hour traffic times could shift, which would force commuters to re-evaluate their payoffs. Eventually, though, the game would likely approach an equilibrium where all the commuters are in a relatively dominant position.
Video: http://www.youtube.com/watch?v=_9do1ai_8_A
-bobsacamano