Do Smart Traffic Lights Reduce Congestion?

Serguei Netessine, Operations, Information and Decisions, The Wharton School; Vivek Choudhary, INSEAD; and Masha Shunko, Foster School of Business

Abstract: The smart traffic light is one of the major disruptions for smart cities. Many countries such as Singapore and the USA have already started testing and even implementing them to decongest their growing road traffic. Although in theory, the benefits of smart traffic lights are obvious, it is of utmost importance to estimate the causal effect of this intervention in terms of the dollar value. Moreover, the adoption of any new technology requires careful study to identify and mitigate unintended consequences. This is important in this setup because of the network effect. This will help the city planners to better understand the impact of the investments made. Insights drawn from this work have implications on technology adoption, society, and economy. To study the effect of the implementation of smart traffic lights in the field, we have partnered with a firm that develops smart traffic lights using state-of-the-art technology. They have recently implemented them in Maine, USA. We will study the effect of the smart traffic lights on road traffic, congestion, and the network effect for these installations.