Network architecture and traffic flows

John Morgan, Henrik Orzen and Martin Sefton

No 2006-12, Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham

Abstract: This paper presents theory and experiments to investigate how network architecture influences route-choice behavior by comparing outcomes across several different networks. The network changes we consider are based on abstract examples illustrating the Pigou-Knight-Downs and Braess Paradoxes. We show that these paradoxes are specific examples of more general classes of network change properties that we term the “least congestible route” and “size” principles, respectively. We find that technical improvements to networks induce adjustments in traffic flows in the direction predicted by equilibrium theory. In the case of network changes based on the Pigou-Knight-Downs Paradox, these adjustments undermine short-term payoff improvements. In the case of network changes based on the Braess Paradox, these adjustments reinforce the counter-intuitive, but theoretically predicted, effect of reducing payoffs to network users.

Date: 2006-07
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