Daily commuting

Abstract

Workers generally commute on a daily basis, so we model commuting as a repeated game. The folk theorem implies that for sufficiently large discount factors, the repeated commuting game has as a Nash equilibrium any feasible strategy that is uniformly better than the minimax strategy payoff for a commuter in the one shot game, repeated over the infinite horizon. This includes the efficient equilibria. An example where the efficient payoffs strictly dominate the one shot Nash equilibrium payoffs is provided. Our conclusions pose a challenge to congestion pricing in that equilibrium selection could be at least as effective in improving welfare. We examine evidence from St. Louis to determine what equilibrium strategies are actually played in the repeated commuting game.