25.8.13

THE INFORMATION CONTENT OF PRICES.

A higher posted toll on a High Occupancy Toll lane induces more Minnesota drivers to pay the toll and use the lane.
Since the HOT lanes in Minnesota (and elsewhere) only show drivers the toll charge, as opposed to how much traffic is ahead, drivers may have come to see the toll as "a signal of downstream congestion."

That's a pretty creative solution to the problem of limited information.
The article doesn't mention whether Minnesota expressways have those "Current Time To ..." signs popular around Chicago and Milwaukee. The underlying problem, though, is getting to work on time without having to shave faster or gulp the coffee.
HOT lane drivers may simply place a higher value on their time than the population at large. An even more tempting reason is that they place a very high premium on the reliability of their commute.

In that sense, the basic question faced by HOT lane drivers every day — to pay or not to pay — may in fact be replacing a far more difficult one: when do I have to leave the house to be on time for work?
Put another way, the presence of a HOT lane gives a commuter the option of leaving at the same time each day and still reaching work. On days the price is low, the commuter interprets the price as a noisy signal of an unvexed commute in the subsidized lanes.  The option is out of the money.  When the price is high, the option is in the money.

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