According to Wardrop's first principle, agents in a congested network choose their routes selfishly, a behavior that is captured by the Nash equilibrium of the underlying noncooperative game. A Nash equilibrium does not optimize any global criterion per se, and so there is no apparent reason why it should be close to a solution of minimal total travel time, i.e. the system optimum. In this paper, we offer extensions of recent positive results on the efficiency of Nash equilibria in traffic networks. In contrast to prior work, we present results for networks with capacities and for latency functions that are nonconvex, nondifferentiable and even discontinuous. The inclusion of upper bounds on arc flows has early been recognized as an important means to provide a more accurate description of traffic flows. In this more general model, multiple Nash equilibria may exist and an arbitrary equilibrium does not need to be nearly efficient. Nonetheless, our main result shows that the best equilibrium is as efficient as in the model without capacities. Moreover, this holds true for broader classes of travel cost functions than considered hithert
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Paper provided by Massachusetts Institute of Technology (MIT), Sloan School of Management in its series Working papers with number
4319-03.
Length: Date of creation: 01 Aug 2003 Date of revision: Handle: RePEc:mit:sloanp:3533
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