Congestion Information and Efficiency: An Experiment

Users are now typically able to access historical data in traffic, restaurant, and retailing contexts. This availability of information can be viewed as a means to reduce congestion. However, scientific support for this notion is weak. We investigate, using a laboratory experiment, whether an intermediate level of information provision might reduce congestion. We also study how the effect of making more information available changes over time. We show that providing all users with information is counterproductive in the short run. In the long run, users’ behavior adjusts so that providing some or all individuals with information leads to more efficient outcomes than when no information is made available. Small Sample models capture a number of the patterns in the data, in particular the switching behavior between routes. The data show that making congestion information available to all parties reduces efficiency early on but is beneficial in the long run.

This paper was accepted by Marie Claire Villeval, behavioral economics and decision analysis.

Funding: The authors thank the Economic Science Laboratory at the University of Arizona and the National Natural Science Foundation of China [Grant 72403135] for funding.

Supplemental Material: The online appendices and data files are available at https://doi.org/10.1287/mnsc.2023.00056.