Real Esate & Planning Research Seminar by Professor Antonio Russo, Institut Mines-Télécom Business School Title: "Navigation Apps and Traffic Externalities"

Abstract:

We study the economics of information provided by navigation apps that guide users through local roads. We examine the app’s incentives to provide users with information that reduces their travel cost, either by taking local shortcuts (rat runs) or by accounting for traffic calming policies by local governments. We establish that, under reasonable conditions, the information provided by the app enables excessive shortcuts. These conditions depend on marginal external costs of congestion, on externalities on the local population and on other traffic management policies (e.g., road tolls). However, we also show that the app may have insufficient incentives to incorporate traffic calming information in its paths. We also examine the response by local governments when designing their traffic policy.

Bio: Antonio Russo is Professor of Economics at Institut Mines Telecom, Business School. He was previously held positions at the University of Sheffield and Loughborough University. His main research areas include urban and transport economics, industrial organization, digital platform economics, and public economics. His work is published in journals including Management Science, Marketing Science, Rand Journal of Economics and Journal of Urban Economics.