Do Game-Theory-Playing Traffic Lights Reduce Congestion?

That is what the headline of this fascinating article says. Here is a quote from the news report:

In lay language," [Samah] El-Tantawy said in a U of T news release, "the [traffic lights] act as a team of players cooperating to win a game — much like players in a soccer match, where each player endeavors to score, but at the same time considers the ultimate goal of the entire team which is winning the match.

According to the article, travel times were reduced by 26 percent, which is fantastic, and which is what matters.

This doesn’t, however, seem to have much to do with game theory. Game theory is about one of two things: strategic behavior or finding sustainable equilbria. But the traffic lights don’t care about their own private utility.  There is no sense in which they are actors at all, as traffic lights just do what you tell them to do.  In economic terms, there is a central planner who sets the rules which the traffic lights obey. This new scheme provides a new and better set of rules (which, again, I emphasize is great), but I don’t think game theory should get the credit!

(Related: see our "Jane Austen, Game Theorist" podcast.)

via Freakonomics http://freakonomics.com/2013/11/13/do-game-theory-playing-traffic-lights-reduce-congestion/

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