The Effects of Induced Demand on Highway Congestion
https://www.citylab.com/transportation/2018/09/citylab-university-induced-demand/569455/
The article discusses how the building of new roads in an attempt to reduce traffic congestion can actually worsen traffic congestion. The underlying principle, as explained in the article, is the principle of induced demand whereby more people will demand a resource whose price has been significantly reduced. With respect to road construction, induced demand occurs when new roads are built, allowing for “easier” transportation which attracts many new consumers. As a result, these new roads become overcrowded to the point where traffic jams become worse than they were before construction. Simply put, “induced demand demonstrates that traffic is more like a gas, expanding to fill up all the space it is allowed.” In fact, studies have shown that the effects of induced demand can be noticed in as little as three years.
This idea is analogous to the network flow we were shown in class. As a consequence of adding another road onto a traffic network graph, we were able to show the total travel time in a Nash equilibrium actually increased. Known as Braess’s paradox, if each individual were to make a decision based solely on their own self-interest, the entire network would likely suffer. Referring back to induced demand, whenever a new road is built lowering the overall cost of transportation, individuals are likely to react accordingly. However, because each individual is assumed to act rationally, they always select their local maximum without regard for the remainder of the network. When each individual reaches this conclusion independently, the result is the prisoner’s dilemma on a grander scale.