Effective Policies and Social Norms in the Presence of Driverless Cars: Theory and Experiment

37 Pages Posted: 11 Jun 2019 Last revised: 29 Jul 2019

See all articles by Antonio Cabrales

Antonio Cabrales

University College London - Department of Economics

Ryan Kendall

University College London - Department of Economics

Anxo Sánchez

Departamento de Matemáticas, Universidad Carlos III, Leganés (Madrid)

Date Written: June 2019

Abstract

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 Classification: C90, D62, D63

Suggested Citation

Cabrales, Antonio and Kendall, Ryan and Sánchez, Angel, Effective Policies and Social Norms in the Presence of Driverless Cars: Theory and Experiment (June 2019). CEPR Discussion Paper No. DP13784. Available at SSRN: https://ssrn.com/abstract=3401871

Antonio Cabrales (Contact Author)

University College London - Department of Economics ( email )

Drayton House, 30 Gordon Street
30 Gordon Street
London, WC1H 0AX
United Kingdom

Ryan Kendall

University College London - Department of Economics ( email )

Drayton House, 30 Gordon Street
30 Gordon Street
London, WC1H 0AX
United Kingdom

Angel Sánchez

Departamento de Matemáticas, Universidad Carlos III, Leganés (Madrid) ( email )

Grupo Interdisciplinar de Sistemas Complejos
Departamento de Matemáticas,Universidad Carlos III
Madrid, Madrid 28933
Spain

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