Game Theory and Car Crashes
The year 2020 will never be forgotten, mainly because of the emergence of Covid. However, other more surprising outcomes were seen as well. As one could expect, due to social distancing, self-isolating, and other forms of quarantines, Americans drove far less than they did in 2019. In the first 6 months of 2020, as opposed to in 2019, over 260 billion fewer miles were driven, for a decline of about 17%. However, driving-related fatalities only fell 2%. Which meant the rate of fatalities per mile driven rose by 18%.
Although the roads were less busy, higher percentages of people ended up in fatal automobile accidents. Is this because the people who stayed home were the same people who took Covid more seriously and therefore are just more careful? I don't think so. People's views on the costs and benefits of speeding and reckless driving have fundamentally changed from the impacts of Covid, which can be modeled through game theory.
The cost of reckless driving ranges from small fines to major financial burdens and health issues, such as injuries or death. On the other hand, speeding (which I will conflate with reckless driving) has benefits of enjoyment and faster travel. The amount of speeding that is done is then the intersection of the two, or in other words, where the driver decides the risk is equivalent to the rewards. If there were no risks of punishment or collision, then everyone would be speeding. If there were either an overwhelming risk or no benefits, then no one would speed.
In 2020 with fewer drivers on the road driving fewer miles, the costs and benefits of reckless driving have changed. The benefits have largely stayed the same. Faster travel and exhilaration from driving fast have not changed. Similarly, the benefits from reducing a commute have stayed the same. However, society as a whole has decided the costs have reduced. This reduction of costs comes from the perceived decrease in the risk of an accident. At first glance, this seems logical. Fewer people on the road means a lower chance of hitting someone else or someone else hitting you. However, clearly, people have overcompensated. If people accurately evaluated risk, we would see fatalities per mile driven to stay constant, not rise by 18%.
This rise comes from continued underestimations of risk. This underestimation is often thought to be endemic to humanity and is important to account for when making decisions. The rise in automobile deaths is just one example of many people's difficulty in assigning risk to actions. And while this case study is specific to automobile deaths in America, its significance can be extrapolated to everything from risk of bankruptcy and recession to stock market investments.
Written by Ethan Rothstein ‘23
Edited by Naomi Santiago ‘22
Sources:
https://www.wsj.com/articles/car-crash-death-rate-surged-in-2020-11610101800
