Congested roads can be seen as an example of the tragedy of the commons. Because roads in most places are free at the point of usage, there is little financial incentive for drivers not to over-use them, up to the point where traffic collapses into a jam, when demand becomes limited by opportunity cost. Privatization of highways and road pricing have both been proposed as measures that may reduce congestion through economic incentives and disincentives. Congestion can also happen due to non-recurring highway incidents, such as a crash or roadworks, which may reduce the road's capacity below normal levels.
Economist Anthony Downs argues that rush hour traffic congestion is inevitable because of the benefits of having a relatively standard work day. In a capitalist economy, goods can be allocated either by pricing (ability to pay) or by queueing (first-come first-served); congestion is an example of the latter. Instead of the traditional solution of making the "pipe" large enough to accommodate the total demand for peak-hour vehicle travel (a supply-side solution), either by widening roadways or increasing "flow pressure" via automated highway systems, Downs advocates greater use of road pricing to reduce congestion (a demand-side solution, effectively rationing demand), in turn plowing the revenues generated therefrom into public transportation projects.
A 2011 study in the The American Economic Review indicates that there may be a "fundamental law of road congestion."The researchers, from the University of Toronto and the London School of Economics, analyzed data from the U.S. Highway Performance and Monitoring System for 1983, 1993 and 2003, as well as information on population, employment, geography, transit, and political factors. They determined that the number of vehicle-kilometers traveled (VKT) increases in direct proportion to the available lane-kilometers of roadways. The implication is that building new roads and widening existing ones only results in additional traffic that continues to rise until peak congestion returns to the previous level.