A driver going to the city center has the choice between a small road and the...

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Economics

A driver going to the city center hasthe choice between a small road and the highway. The small roadtakes 25 minutes (1500 seconds) and is never affected by traffic.The highway takes only 15 minutes (900 seconds) but travel timeincreases by 2 seconds every time a new person gets in it. Thetravel time on the highway is therefore 15 minutes + 2 seconds perentrant.
Explain why Net Benefits (NB) = 0 at the Tragedy of theCommons. Hints: What would happen if NB > 0? Think of the NetBenefits as the Average Net Benefit (for each driver) multiplied bythe number of drivers (NB = ANB*N).

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This example can be used to highlight the main aspects of Tragedy of the Commons The choice that drivers face is between the small road and the highway The highway offers a much faster travel time but is affected by traffic In fact every new entrant adds to the traffic congestion and reduces travel time With every new entrant 2 seconds are added to the travel time This means with 30 entrants 60 seconds are added With 300 See Answer

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