All-Way Stops

Abstract

We show that tweaking a familiar crossroad-traffic-control practice in the United States (and many other countries) has the potential to significantly reduce energy consumption and carbon emissions (more than one week of gas consumption annually) without jeopardizing road safety: Instead of erecting one stop sign in each direction (e.g., four stop signs at a four-way crossroads), erect one fewer sign at each crossroads (e.g. only three stop signs at a four-way crossroads). The simpler mechanism reduces energy consumption by avoiding unnecessary re-accelerations, and preserves road safety by rendering all drivers' adherence to traffic rules incentive compatible (while the existing mechanism does not). Hence, the new mechanism is also self-enforcing, leading to savings in police expenditures besides those in carbon/pollutants emissions, drivers' time, and infrastructure costs. 

Keywords: carbon emission, infrastructure spending, game theory, mechanism design, Nash equilibrium, police funding, traffic

JEL Classification: A12, C72, D49, H79, K39, L99, Q35, Q49, Q53, Q54, R41