Using Nudging Information to Manage Congestion and Emissions in a Road and Metro Network

This paper studies nudging information and how it can alter commuter behaviour through awareness of the health and environmental impacts of their choices. We investigate how effective and beneficial nudging can be, depending on, amongst other things, how people respond to the nudging. We develop a bi-modal road and metro network model that includes bottleneck road congestion and crowding in the metro. We include health costs and environmental externalities. When commuters are homogeneous, nudging generates positive welfare effects, except under extremely high crowding effects. Moreover, nudging can consistently complement flat road tolls. By adding variations in environmental preferences, car types, and income, the study further highlights that the effectiveness of such strategies depends on heterogeneity in behavioural responses and preferences. Nudging is more likely to lower welfare when causing welfare-reducing swaps in drivers’ departure patterns; and, in such cases, it does not complement flat tolling. Our results reveal that although nudging may be analytically similar to pricing, it operates through non-monetary behavioural incentives and thus has distinctly different, and sometimes adverse, welfare outcomes.