Public Transit Capacity and Users Choice: An
Experiment on Downs-Thomson Paradox

Laurent Denant-Boemont (1) , Sabrina Hammiche (1)

1 CREM - Centre de recherche en économie et management

We study the Downs-Thomson paradox, a situation where an additional road capacity can cause an overall increase in transport generalized cost and therefore a decrease in welfare for transport users. To this end, we build an experiment based on a double market-entry game (DMEG) where users have to choose between road and public transit after that the operator has choosen public transit capacity. The optimal strategy for operator is to minimize capacity, and the equilibrium for users depend on the endogeneous public transit capacity compared to exogeneous road capacity. The most important result is that we observe the Downs-Thomson paradox empirically in the laboratory: An increase in road capacity causes shift from road to rail and, at the end, increases total travel costs. But the contrary is not true: A decrease in road capacity does not cause lower total travel costs, which is in contradiction with our theoretical model. Results also show that the capacity chosen by operator di§ers from Nash prediction, levels being signiÖcantly higher than those predicted by our model. Moreover, users coordinate remarkably well on Nash equilibrium entry rate while capacity has been chosen by operator.

cet article étudie le paradoxe de Downs-Thomson au moyen de l'économie expérimentale.

Mots clés: traffic equilibrium; public transit; experimental economics; market entry game

Mots clés: équilibre de trafic; transport public; congestion; économie expérimental; jeu d'entrée de marché

Domaines: Economies et finances

Laurent Denant-Boemont, Sabrina Hammiche. Public Transit Capacity and Users Choice: An
Experiment on Downs-Thomson Paradox. 2009. ⟨halshs-00405501⟩