I’ve always wondered why there’s often a long stretch between buses, and then three show up at the same time. I just attribute it to the same kind of dynamics that you find in fractals that lead to “focal points”, but a November NBER working paper by Johnson, Reiley and Munoz use that observation as the starting point for a research project. They use bus service in Santiago, Chile as a natural experiment, because there are two systems there: in one bus drivers are paid a fixed wage, and in the other bus drivers are paid according to how many passengers they pick up. The fixed-rate routes have more bus bunching, consistent with my observation. The good news is that the ensuing “war for the fare” means shorter waits for the customers on the incentive fare routes. The bad news is that those drivers cause 67% more accidents. That should be easy to remedy, with another dimension in the wage for a deduction for accidents.
Hat tip to Adam Smithee for the link.
Tagged with: economics