Information Design for Regulating Traffic Flows under Uncertain Network State

Abstract

Traffic navigation services have gained widespread adoption in recent years. The route recommendations generated by these services often leads to severe congestion on urban streets, raising concerns from neighboring residents and city authorities. This paper is motivated by the question: How can a transportation authority design an information structure to induce a preferred equilibrium traffic flow pattern in uncertain network conditions? We approach this question from a Bayesian persuasion viewpoint. We consider a basic routing game with two parallel routes and an uncertain state that affects the travel cost on one of the routes. The authority sends a noisy signal of the state to a given fraction of travelers. The information structure (i.e. distribution of signals in each state) chosen by the authority creates a heterogeneous information environment for the routing game. The solution concept governing the travelers’ route choices is Bayesian Wardrop Equilibrium. We design an information structure to minimize the average traffic spillover – the amount of equilibrium route flow exceeding a preferred limit – on one of the routes. We provide an analytical characterization of the optimal information structure for any fraction of travelers receiving the signal. We find that the optimal information structure can achieve the minimum spillover so long as the fraction of travelers receiving the signal is larger than a threshold (smaller than 1).