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Asymmetric Information on I-95

In a footnote to Traffic, MIT’s Moshe Ben-Akiva discusses the varying strategies of dynamic tolling:

“You may want to charge people for time they actually save. That will mean if congestion builds up on the tolled road you reduce the price. On the other hand, you want to maintain a certain level of speed on the toll-road. If congestion builds up you want to increase the toll so as to not have stop-and-go traffic on the tolled road. There is some confusion going on right now as to what strategy is best.”

it seems that confusion is still out there, based on this dispatch from the Miami Herald.

Traffic engineers assumed high tolls would deter drivers from using express lanes. Wrong.

Many drivers, like Perkovich, assume high tolls mean the toll-free lanes are clogged. Could be true, but the tolls rise mainly due to the number of drivers willing to pay a toll.

Perhaps it’s not easy to make these decisions at high speed in a split second. Perhaps there’s some weird signaling effect going on in which higher prices lead to higher demand (for reasons of perceived quality or some other factor). Maybe the tolls aren’t high enough to deter drivers. Maybe the problem would vanish if drivers were given a more precise sense of time savings (as far as I know they are not). But South Florida drivers are not the first to be undeterred by higher tolls.

Before HOT lanes were launched on an I-10 commuter highway serving the Houston area, the Texas Transportation Institute based at Texas A & M University made an extensive study of driver attitudes and beliefs.

As many as 20 percent of the participants in several focus groups incorrectly interpreted the HOT lane toll as an index of traffic congestion in the free lanes, said Susan Chrysler, an institute research psychologist.

“Even after I showed them a video that explained it, they still misunderstood it,” Chrysler said. In Florida, DOT has responded with a crash public information campaign. A prominent message on the Express Lane website, 95express.com, clearly explains the system. And SunPass holders recently received a special mailing with the same message: higher tolls may mean a slower ride.

The market is still working, though perhaps not as rationally as might be hoped.

Despite the misunderstanding, the Express Lanes are easing traffic. Santana says the toll lanes are maintaining a comfortable 16 mile-an-hour speed advantage over the free lanes. A typical $2.50 to $3.00 rush hour toll usually buys a 45-mph drive between South Broward and downtown Miami, according to DOT data.

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This entry was posted on Friday, April 2nd, 2010 at 2:22 pm and is filed under Roads, Traffic Psychology, Traffic Wonkery, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

6 Responses to “Asymmetric Information on I-95”

  1. Peter Smith Says:

    this is the most confusing thing i’ve ever read. i can see why drivers are confused.

    to me, it’s pretty simple. put a sign a couple of miles ahead of the tolls that say how much the tolls are. the tolled roads should be fast-moving at all times, so jack the toll price up to whatever level is required to keep the lanes moving quickly. rocket science?

  2. Peter Smith Says:

    Peter: the confusion is that drivers are interpreting a high price on these variably-priced toll roads as a signal that the free road is backed up (and thus driving demand towards the toll road).

    The other element is that regular toll-road drivers are keenly interested in avoiding congestion. Given these momentary decisions between what they think of as a congested road and a tolled road, they might value the toll road very highly indeed, and thus the tolls would have to vary by even more than they do to actually dissuade toll-road use.

    This is a case where the info the driver really wants is the average speeds of both the toll and free roads, and the current price of the toll road.

  3. Vinny Says:

    It is even harder to make a quick decision when you don’t have all of the information. There should be a sign upstream of the entry that displays travel time estimates for both routes and the current toll. Then drivers could easily weight the cost/benefits.

  4. Kevin Love Says:

    I agree with Douglas Emery; the tolls are far too low. $2-3? Big deal.

    Here in Ontario the 407 toll highway will charge $20 and people willingly pay it.

    This has important significance for peak oil. Many people have assumed that in 2-3 years when gasoline hits $10-20 per gallon that this will eliminate the vast majority of car driving. It will in countries like China and India, but in Canada and the USA people will pay those prices to keep driving.

  5. aaron Says:

    Time savings needs to also be posted, but if higher prices induce more people to take the road at a higher price, it’s all the better for the toll company to not present that information. Eventually the public should figure it out for themselves, but they need information. At the least, flow rate for the free roads needs to be presented to effectively compete with the toll road.

    Either a publically administered information system needs to created, or the free roads need a revenue stream to send a signal when they are less congested.

  6. Noah Says:

    I actually published a paper exploring how drivers use dynamically-priced high occupancy toll lanes. The signaling effect is legitimate, and empirical evidence backs it up. As I interpret it, there are two reasons. First, drivers in many systems don’t know travel times. Second, tolls are too low. Surveys suggest that drivers are willing to pay only about $5 an hour, but evidence from I-15 in San Diego suggests the actual value is around $30/hr. Brownstone et al. have done some great work: http://dx.doi.org/10.1016/S0965-8564(02)00021-6.

    The signaling effect only works on drivers that are interested in avoiding congestion that day. However, we found that travel time reliability is a much bigger selling point that actual travel time savings. Many drivers will take the toll road even when there’s no traffic, just to avoid potential congestion. The pool of drivers who would be affected by signaling may be quite small. Mark Burris at Texas A&M is looking into this further.

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