In The Economics of War, the author mentions an example, that has nothing to do with war, about people’s driving behaviours. He talks about people who race through a yellow light during a rush hour, only to be stopped before they clear the intersection. This impedes the flow of traffic in the other direction until their light turns yellow, and a couple of cars in their direction race the light and obstruct the intersection again. So on and so forth. The author argues that the last few cars are acting economically sound because it lets them reach their destination a little bit quicker, at the expense of slowing everyone else down. Basically your micro vs macro argument.

I see examples of these quite frequently when driving, especially in rush hour where I think you need to be aggressive or be a chump. But I noticed a situation which is counterintuitive in that putting one’s interests ahead of society’s actually helps everyone out.

On my drive home, the onramp to the highway has to merge the cars from two directions, with my direction being the lane that actually ends up on the highway. Now some cars that approach, merge at the first sign of a space; which is good for society because they end up waiting in their assigned space in line. Other cars however, accelerate ahead until the very end of the lane before merging in, thereby jumping several spaces in the queue even though they were side-by-side with you at the beginning. This is beneficial for them because they get home sooner, but it pushes everyone else back one space.

But here’s the interesting thing that’s wrong with this analysis. There will always be people who wait until the last minute to merge, because it’s the most beneficial for the individual. So the people who are merging early, in actuality, are allowing the cars behind them to jump ahead of them and merge closer to the front of the line. Now if you’re behind all of these cars, and watching cars merge early; instead of being behind x cars, you end up being behind x+y cars, which is bad for the society of cars waiting to go on the highway. So always merge at the last minute unless there is no traffic.

Posted by Kevin in Blogs Tags: cars, driving, economics, neat