Nash Equilibrium in Dhaka
This article explores the possibility of using Nash Equilibrium in the real world in the context of social welfare. The article singles out Dhaka, the capital of Bangladesh and observes the community of drivers in particular. Ultimately for the drivers of buses, the more passengers they have, the more money they make. Therefore, they are seeking to maximize the number of passengers they have. Next, the article looks at the issue from the perspective of the passengers. For the passengers, the ultimate goal is to get from destination A to destination B as quickly as possible. When choosing between two buses, it is safe to assume that the bus parked in the front will ultimately leave first and therefore get to a destination before the bus behind it. Thus, the passengers have no incentive, for all intents and purposes, to get on any other bus.
In a perfect world, all the buses would be lined up orderly at the junction and would leave as they filled up. Buses would line up in the leftmost lane, center lane, or right lane based off of what route they will need to take. The problem that arises, however, is that in the real world, buses will crowd around and cut lanes in order to get to the front in order to get as many passengers as possible, leading to a chaotic traffic jam. Why do they continue to create traffic jams? The article creates a matrix to show why with both players being different bus drivers and strategies being 1 – following the lane or 2 – breaking the lane. The payoffs are set from 2-4, with 2 being lowest and 4 being highest.
| D1/D2 | Follow the lane | Break the lane |
| Follow the lane | 3,2 | 2,3 |
| Break the lane | 4,2 | 2,2 |
This creates an interesting situation in which both of the drivers will have a tendency to break the lane for a supposed higher pay-off, but if both break the lane, they both end up at (2,2), when in reality, this is not the most optimal outcome.
http://www.thefinancialexpress-bd.com/2016/09/17/46117/A-recipe-for-reducing-Dhaka-traffic-snarls#prettyPhoto