Public Transit Capacity and Users Choice: AnExperiment on Downs-Thomson Paradox
We study the Downs-Thomson paradox, a situation where an additional road capacitycan cause an overall increase in transport generalized cost and therefore a decrease in welfarefor transport users. To this end, we build an experiment based on a double market-entrygame (DMEG) where users have to choose between road and public transit after that the op-erator has choosen public transit capacity. The optimal strategy for operator is to minimizecapacity, and the equilibrium for users depend on the endogeneous public transit capacitycompared to exogeneous road capacity. The most important result is that we observe theDowns-Thomson paradox empirically in the laboratory: An increase in road capacity causesshift from road to rail and, at the end, increases total travel costs. But the contrary isnot true: A decrease in road capacity does not cause lower total travel costs, which is incontradiction with our theoretical model. Results also show that the capacity chosen byoperator di¤ers from Nash prediction, levels being signi cantly higher than those predictedby our model. Moreover, users coordinate remarkably well on Nash equilibrium entry ratewhile capacity has been chosen by operator.
|Date of creation:||10 Jun 2009|
|Date of revision:|
|Note:||View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00405501|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David Kreps & Paul Milgrom & John Roberts & Bob Wilson, 2010.
"Rational Cooperation in the Finitely Repeated Prisoners' Dilemma,"
Levine's Working Paper Archive
239, David K. Levine.
- Kreps, David M. & Milgrom, Paul & Roberts, John & Wilson, Robert, 1982. "Rational cooperation in the finitely repeated prisoners' dilemma," Journal of Economic Theory, Elsevier, vol. 27(2), pages 245-252, August.
- Dan Lovallo & Colin Camerer, 1999. "Overconfidence and Excess Entry: An Experimental Approach," American Economic Review, American Economic Association, vol. 89(1), pages 306-318, March.
- Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
- Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
- John Duffy & Ed Hopkins, 2001.
"Learning, Information and Sorting in Market Entry Games: Theory and Evidence,"
ESE Discussion Papers
78, Edinburgh School of Economics, University of Edinburgh.
- Duffy, John & Hopkins, Ed, 2005. "Learning, information, and sorting in market entry games: theory and evidence," Games and Economic Behavior, Elsevier, vol. 51(1), pages 31-62, April.
- John Duffy & Ed Hopkins, 2010. "Learning, Information and Sorting in Market Entry Games: Theory and Evidence," Levine's Working Paper Archive 506439000000000355, David K. Levine.
- Anthony Ziegelmeyer & Frédéric Koessler & Kene Boun My & Laurent Denant-Boèmont, 2008.
"Road traffic congestion and public information : an experimental investigation,"
- Anthony Ziegelmeyer & Frédéric Koessler & Kene Boun My & Laurent Denant-Boèmont, 2008. "Road Traffic Congestion and Public Information: An Experimental Investigation," Journal of Transport Economics and Policy, University of Bath, vol. 42(1), pages 43-82, January.
- Kene Boun My & Laurent Denant-Boèmont & Frédéric Koessler & Marc Willinger & Anthony Ziegelmeyer, 2006. "Road Traffic Congestion and Public Information: An Experimental Investigation," Papers on Strategic Interaction 2006-20, Max Planck Institute of Economics, Strategic Interaction Group.
- Anthony Ziegelmeyer & Frédéric Koessler & Kene Boun My & Laurent Denant-Boèmont, 2007. "Road Traffic Congestion and Public Information: An Experimental Investigation," THEMA Working Papers 2007-05, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Mohring, Herbert, 1972. "Optimization and Scale Economies in Urban Bus Transportation," American Economic Review, American Economic Association, vol. 62(4), pages 591-604, September.
- Hoffman, Elizabeth & McCabe, Kevin & Smith, Vernon, 2008. "Reciprocity in Ultimatum and Dictator Games: An Introduction," Handbook of Experimental Economics Results, Elsevier.
- Arnott, R. & De Palma, A. & Lindsey, R., 1992. "Properties of Dynamic Traffic Equilibrium Involving Bottlenecks, Including A Paradox and Metering," Papers 9201, Universite Libre de Bruxelles - C.E.M.E..
- GARY-BOBO, Robert J., .
"On the existence of equilibrium points in a class of asymmetric market entry games,"
CORE Discussion Papers RP
905, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Gary-Bobo, Robert J., 1990. "On the existence of equilibrium points in a class of asymmetric market entry games," Games and Economic Behavior, Elsevier, vol. 2(3), pages 239-246, September.
- Erev, Ido & Rapoport, Amnon, 1998. "Coordination, "Magic," and Reinforcement Learning in a Market Entry Game," Games and Economic Behavior, Elsevier, vol. 23(2), pages 146-175, May.
- Andersson, Ola & Holm, Håkan J., 2010.
"Endogenous communication and tacit coordination in market entry games: An explorative experimental study,"
International Journal of Industrial Organization,
Elsevier, vol. 28(5), pages 477-495, September.
- Andersson, Ola & Carlsson, Hans & Holm, Håkan, 2006. "Endogenous Communication and Tacit Coordination in Market Entry Games - An explorative experimental study," Working Papers 2006:12, Lund University, Department of Economics.
- Selten, R. & Chmura, T. & Pitz, T. & Kube, S. & Schreckenberg, M., 2007. "Commuters route choice behaviour," Games and Economic Behavior, Elsevier, vol. 58(2), pages 394-406, February.
When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:halshs-00405501. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)
If references are entirely missing, you can add them using this form.