The Freeway Game was created to help students come to grips with the concept of 'externality'. In the game, traffic congestion is simulated to demonstrate the effect of a negative externality.
When deciding whether to get on the freeway during rush hour, did you ever stop to consider that if you did so, you would slow everybody ELSE down? When we ask our students that question, they typically laugh—their only consideration is how long their own trip will take. When a decision maker does not account for all the costs or benefits associated with a decision, there exists what economists call an 'externality.' Externalities are commonplace, and can cause significant problems (or create significant benefits) for firms and society. In the Freeway Game, a traffic externality causes congestion on the freeway. As a result, it takes too long for people to commute. A toll can be used to internalize the traffic externality and eliminate the congestion. The Freeway Game helps students understand negative externalities and develop ways of at least partially neutralizing their undesirable effects.
Instructors who would like to use the game in class can download the teaching note from here. For additional information on the game, please refer to the 2015 DSJIE Outstanding Teaching Brief: Giraud-Carrier, F.C. and Schmidt, G.M. (2015). Learning in the Fast Lane: The Freeway Game. Decision Sciences Journal of Innovative Education, 13(3), 273-287.
The instructor must create a game before students can play. For detailed instructions and rules, click