2 ms·
Eh, I think that’s a misstatement of market dynamics. Yes, congestion is stating that demand is exceeding capacity. However… Congestion is a pushback signal th
by lazide 2y ago
Eh, I think that’s a misstatement of market dynamics. Yes, congestion is stating that demand is exceeding capacity. However…
Congestion is a pushback signal that reduces actual demand, by reducing quality/utility of the actual ‘product’.
Congestion is demand being throttled through the mechanism of reduction in quality/availability, instead of some other mechanism, like increases in pricing (tolls), or reduction in customers (aka population decreases or exclusionary rules) through the natural usage of the system. Due to induced demand. Because there is almost always more ‘low quality’ demand, than ‘high quality’ demand. It’s a type of tragedy of the commons.
In any ‘free’ system, it almost always ends up this way (see crazy long wait times in nationalized health systems!) precisely because the other options are excluded. Just like on free ways.