Effective policies and social norms in the presence of driverless cars: Theory and experiment
Antonio Cabrales (),
Ryan Kendall and
No 13784, CEPR Discussion Papers from C.E.P.R. Discussion Papers
We consider a situation where driverless cars operate on the same roads as human-driven cars. What policies effectively discourage unsafe (fast) drivers in this mixed-agency environment? We develop a game theoretic model where driverless cars are the slowest and safest choice whereas faster driving speeds lead to higher potential payoffs but higher probabilities of accidents. Faster speeds also have a negative externality on the population. The model is used to create four experimental policy conditions. We findt hat the most effective policy is a mechanism where the level of punishment (to fast drivers) is determined endogenously within the driving population.
JEL-codes: C90 D62 D63 (search for similar items in EconPapers)
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