Traffic Paradoxes and Economic Solutions

Previous studies on traffic congestion have emphasized supply-side instruments, such as the expansion of road capacity and improving the management of traffic. However, researchers on transportation have identified several paradoxes in which the usual remedy for congestion-expanding the road system-is ineffective or even counterproductive. This paper presents three paradoxes of traffic flow in their general form and provides economic solutions to overcome them, with an emphasis on demand-side policies by examining the behavior of commuters and using pricing mechanisms.