Economic Analysis of Vehicle-Infrastructure Cooperative Approach for Enabling Automated Driving

Accepted for publication in Transportation Research Part C: Emerging Technologies

24 Pages Posted: 1 May 2021 Last revised: 15 Jun 2022

See all articles by Daniel Vignon

Daniel Vignon

New York University (NYU) - NYU Tandon School of Engineering

Yafeng Yin

University of Michigan, Ann Arbor

Sina Bahrami

Eindhoven University of Technology

Ken Laberteaux

Toyota Research Institute

Date Written: April 24, 2021

Abstract

The current approach to driving automation has been primarily vehicle-centric. However, a
vehicle-infrastructure cooperative approach, in which infrastructure and vehicles cooperate to
perform the different driving tasks, may prevail in enabling automated driving. This paper
conducts an economic analysis of vehicle infrastructure cooperation for automated driving. In
doing so, we present a model that captures investment decisions in vehicle automation and infrastructure digitalization and their effect on travellers’ purchase and travel decisions. Our analysis
shows that, under certain conditions, equipping both infrastructure and vehicles is socially
optimal. However, by analyzing strategic interactions between infrastructure support service
providers and automakers, we show that lack of coordination between these two actors results in
suboptimal investment in vehicle automation and infrastructure digitalization. Especially, when
these two technologies are complementary, service providers are reluctant to invest in digital
infrastructure and vehicle manufacturers tend to over equip their vehicles so as to avoid relying
on infrastructure technology. Thus, we conclude by showing that better coordination between
automakers and service providers–under the form of profit sharing–is welfare-improving and
could potentially yield the socially optimal levels of automation and digitalization.

Keywords: automated driving, automated vehicles, vehicle-infrastructure cooperation, infrastructure, digitalization

Suggested Citation

Vignon, Daniel and Yin, Yafeng and Bahrami, Sina and Laberteaux, Ken, Economic Analysis of Vehicle-Infrastructure Cooperative Approach for Enabling Automated Driving (April 24, 2021). Accepted for publication in Transportation Research Part C: Emerging Technologies, Available at SSRN: https://ssrn.com/abstract=3833485 or http://dx.doi.org/10.2139/ssrn.3833485

Daniel Vignon

New York University (NYU) - NYU Tandon School of Engineering ( email )

6 MetroTech Center
Brooklyn, NY 11201
United States

Yafeng Yin (Contact Author)

University of Michigan, Ann Arbor ( email )

2350
Hayward Street
Ann Arbor, MI 48109
United States

Sina Bahrami

Eindhoven University of Technology ( email )

Department of Built Environment
Eindhoven, 5612 AZ
Netherlands

Ken Laberteaux

Toyota Research Institute ( email )

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