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Effective policies and social norms in the presence of driverless cars: Theory and experiment

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  • Cabrales, Antonio
  • Kendall, Ryan
  • Sánchez, Anxo

Abstract

We consider a situation where driverless cars operate on the same roads as human-driven cars. What policies effectively discourage unsafe (fast) drivers in this mixed-agency environment? We develop a game theoretic model where driverless cars are the slowest and safest choice whereas faster driving speeds lead to higher potential payoffs but higher probabilities of accidents. Faster speeds also have a negative externality on the population. The model is used to create four experimental policy conditions. We fi nd that the most effective policy is a mechanism where the level of punishment (to fast drivers) is determined endogenously within the driving population.

Suggested Citation

  • Cabrales, Antonio & Kendall, Ryan & Sánchez, Anxo, 2019. "Effective policies and social norms in the presence of driverless cars: Theory and experiment," CEPR Discussion Papers 13784, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:13784
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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