Congestion Externality and Autonomous Vehicles

We analyze the market desing for autonomous cars (ACs). ACs are self-driving vehicles, driven by a software that does not require human intervention. That of ACs is a relevant market for industrial organization, for at least three reasons. First, companies (Google, Uber, etc) are investing heavily in this market. Second, this may deeply affect the organization of the car transport market. Presumably, people will invest less in private cars, and will use companies (with a foreseeable convergence between taxi and car sharing services). Third, technology (GPS system) susbstantially improves information on traffic flows. This can potentially improve scheduling, and allow for coordinated forms of traffic centralization. This change generates two important questions for IO. From a theoretical perspective, how do different market structures affect the extent of the internalization of congestion externalities? Second, from an applied perspective, how should an efficient and effective market design for autonomous cars look like?