Transportation Game Theory
June 26, 2009
2nd Avenue Sagas has a great post about the apathy that some New Yorkers seem to express about their city's subway system.
Nobody likes price inflation on consumable goods and services; so when MTA decided it had to raise fares to avert a financial disaster, some people were understandably ticked off. But what's fascinating are the threatening comments some people have made; saying things like "nobody is going to pay those ridiculous fares" or "I'll start driving instead". Most are surely empty threats, but they demonstrate a fundamental misunderstanding of the tradeoffs between transportation options in a city like New York.
Sure, traditional economic theory suggests that buyers switch freely between similar goods. If the price of Pepsi goes up, more people buy Coke. If the price of ham goes down, fewer people eat turkey. The difference is that there isn't really a fundamental shortage of soft drinks or lunch meets. There is, on the other hand, a major shortage of drivable pavement and parking spaces in New York City.
The American Community Survey reports that more than 1.9 million New Yorkers commute by public transit and a little more than 1 million commute by car (most drive alone, but some in carpools). Imagine if 10% of New Yorkers, angry about MTA fare hikes, started driving. The result would be about 190,000 additional car commuters. And I hear traffic in New York City is already pretty awful...
These threatening comments illustrate an elementary error that people make in every day game theory: they consider what's in their best interest while ignoring what everyone else might do. See, if a monthly subway pass goes up by $20, then I might personally be better off driving in a car... but only if nobody else comes to that same conclusion.
This is exactly the reason why both drivers and transit commuters in a city like New York should care more about the city's transit infrastructure. Drivers might think they are unaffected by transit cuts or fare hikes, until some former subway riders start jamming up the streets and highways. Transit riders might think that putting their car on the road won't do anything to increase congestion, but it does. In fact, if these tradeoffs were better understood, maybe we could accomplish things like tolling bridges and highways and implementing Michael Bloomberg's congestion pricing scheme. But that's probably still pretty far away.
Nobody likes price inflation on consumable goods and services; so when MTA decided it had to raise fares to avert a financial disaster, some people were understandably ticked off. But what's fascinating are the threatening comments some people have made; saying things like "nobody is going to pay those ridiculous fares" or "I'll start driving instead". Most are surely empty threats, but they demonstrate a fundamental misunderstanding of the tradeoffs between transportation options in a city like New York.
Sure, traditional economic theory suggests that buyers switch freely between similar goods. If the price of Pepsi goes up, more people buy Coke. If the price of ham goes down, fewer people eat turkey. The difference is that there isn't really a fundamental shortage of soft drinks or lunch meets. There is, on the other hand, a major shortage of drivable pavement and parking spaces in New York City.
The American Community Survey reports that more than 1.9 million New Yorkers commute by public transit and a little more than 1 million commute by car (most drive alone, but some in carpools). Imagine if 10% of New Yorkers, angry about MTA fare hikes, started driving. The result would be about 190,000 additional car commuters. And I hear traffic in New York City is already pretty awful...
These threatening comments illustrate an elementary error that people make in every day game theory: they consider what's in their best interest while ignoring what everyone else might do. See, if a monthly subway pass goes up by $20, then I might personally be better off driving in a car... but only if nobody else comes to that same conclusion.
This is exactly the reason why both drivers and transit commuters in a city like New York should care more about the city's transit infrastructure. Drivers might think they are unaffected by transit cuts or fare hikes, until some former subway riders start jamming up the streets and highways. Transit riders might think that putting their car on the road won't do anything to increase congestion, but it does. In fact, if these tradeoffs were better understood, maybe we could accomplish things like tolling bridges and highways and implementing Michael Bloomberg's congestion pricing scheme. But that's probably still pretty far away.
Great post. The problem is that these are tricky concepts to get across to the average American. We really need to think of creative ways to frame this issues, so as to amass the political and public support necessary to pass some initiatives.
Here's one way to frame it: with 15%-20% more drivers on the roads there is now an increased demand for driver-related products and services such as parking fares, auto mechanic fees, car parts and, oh yeah, gasoline without any change in supply. Sticking with 20% for price increases, $3/gal. gas is now $3.60, a $100/month parking pass is now $120 and that $500 repair job is now $600.
Awesome post. If I can get around to it I'm going to get ya a link back.
...I might even have to add my own cents and elaborate. :)