Mitigating Braess’s Paradox with Information Design

Building a new route for public transportation suffers Braess’s paradox in which introducing a cost-efficient link ends up with congestion and efficiency loss. To curb this paradox, this paper incorporates information design in a congestion network model to demonstrate that an optimal information design rule can be leveraged to nudge commuters’ overcrowding behaviors and eliminate Braess’s paradox. This finding highlights that smart communications are critical for improving urban transportation efficiency.