DOES PROVIDING INFORMATION TO DRIVERS REDUCE TRAFFIC CONGESTION

The purpose of this article is to question the presumption that route guidance and information systems necessarily reduce traffic congestion, and to point out the need to consider the general equilibrium effects of information. A simple model of the morning rush hour is adopted in which commuters choose a departure time and one of two routes to work, the capacities of which are stochastic. While expected travel costs are reduced by perfectly informing all drivers about route capacities, this is not necessarily the case if imperfect information is provided. A heuristic explanation is that, absent tolls, congestion is an uninternalized externality. Information can cause drivers to change their departure times in such a way as to exacerbate congestion.