Modeling the Behavior of Traffic Information Providers

This working paper discusses two models used to represent the locational behavior of traffic information providers. The characteristics which make traffic information unique as a service good are discussed and exploited in the models to show how the behavior of reformation providers might differ from that of firms in a traditional market. Questions are addressed regarding the clustering of competing providers and the efficiency of the resulting output. The purpose of this paper is to contribute to the study of the economics of the traffic information industry and of the role of public financing versus private competition.