Economic implications of phantom traffic jams: evidence from traffic experiments

ABSTRACT

Traffic jams occur even without bottlenecks, simply because of interaction of vehicles on the road. From a driver’s point of view, the instability of the traffic flow arises stochastically. Because the probability of a traffic jam increases with the number of cars on the road, there is a traffic flow breakdown externality. This paper offers a method to calculate this externality for traffic on a circuit. Ignoring the stochastic nature of traffic flow breakdowns results in congestion charges that are too small.

KEYWORDS:

• Hypercongestion
• congestion costs
• circuit
• stochastic capacity
• external costs
• congestion charge
• traffic experiments

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Whereas economists refer to the traffic state represented by the upper branch in a speed-flow diagram as congested, because this traffic state already imposes marginal speed losses on other drivers (externalities), other sciences consider this traffic state as freely flowing traffic. For economists, only the small horizontal part of the upper branch is free flow, because there is no externality. Given that, for our analysis, the section without externalities is negligibly small, we use the two terms synonymously and refer to the upper branch as congested or as freely flowing traffic. Economists refer to the traffic state represented by the lower branch as hypercongestion, whereas other sciences call it congestion. To avoid confusion, we refer to the lower branch as hypercongested or jammed traffic.

2. In this calculation, we assume that the probability is calculated in such a way that both the free flow and the jammed traffic holds for a period of time that is long enough for drivers to travel the distance in question, for example, a whole circuit.