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For most drivers in the United States, obeying a stop sign upon approaching an intersection is an unavoidable annoyance. But for ����AV Finance Professor Jiasun Li, it’s a problem waiting to be solved. 

His recent proposes a simple and economical improvement: removing one stop sign from every four-way intersection. According to his calculations, this would boost not only driver safety, but environmental sustainability as well. 

Li specializes in game theory, which models strategic interactions where rational agents seek – as humans generally do–to optimize outcomes for themselves. As he drove around Fairfax, Virginia, Li could not help but view four-way intersections through this academic lens.  

He was struck by the suspicion that having four stop signs at an intersection was a flawed way of preventing traffic accidents. In effect, they lowered the potential cost of not stopping at the intersection, because drivers could assume that motorists from other directions, should there be any, would come to a stop. Drivers turning right, a shallower maneuver with less exposure to oncoming traffic, have the least risk to begin with and would have the greatest incentive to ignore the sign. 

Li surmised that the outcome of all drivers obeying the sign fell short of a Nash equilibrium–game theory’s term for a stable set of norms that all parties are incentivized to follow.  

His working paper presents mathematical models that support his intuition. Comparing the risks of collision against the gains from ignoring the sign (i.e. a smooth driving experience or conserving gasoline), he finds that a symmetric equilibrium under the current four-sign mechanism to be one in which left-turners and straight-line travellers honor the stop sign but right-turners do not. 

In real life, of course, fear of getting slapped with a moving violation increases the likelihood of compliance with stop signs. But the need for law enforcement is less than ideal, Li says. If the four-way stop system were self-enforcing, expensive police resources could be directed toward serious crimes and away from preventive punishment for traffic violators. 

Li’s working paper first considers what would happen if traffic laws were changed to allow right-turners to run the stop sign legally. In an intersection with four stop signs, this would indeed prevent accidents. However, many U.S. intersections have only two signs, which would place right-turners at risk of colliding with traffic coming from the left. In addition, Li argues that old habits die hard, including behind the wheel. 

“If you need people to change their behavior, that’s going to be difficult,” he says. 

Instead, Li recommends removing one sign–any sign–from among the four. In that case, drivers would know that running a stop sign could send them straight into the path of an oncoming car that has not been directed to stop. The universal fear would incentivize compliance without relying on the threat of police punishment. “Importantly, although the safety and incentive analysis rely on game theoretical reasoning, once implemented, a three-sign mechanism does not require any changes in behaviors for law-abiding drivers,” Li says. 

Further, Li’s back-of-the-envelope math suggests that his relatively mundane change could be surprisingly impactful. Based on official statistics from various U.S. authorities, he estimates there are about one million four-way intersections with stop signs in the U.S., each one being traversed by more than 760,000 vehicles per year. That amounts to more than 760 billion (760,000 x one million) stops and starts in a year, one-fourth of which (190 billion) would be avoided in a three-sign setup. 

According to Li’s calculations, assuming it takes 124.9 kilojoules of work to bring a car of average weight to a full stop, and the same amount to resume the previous level of speed, adopting a three-sign system would save a total of 118.65 trillion kJ in the U.S. per year. That equates to one billion gallons of gasoline, or about 2.7 days’ worth of national gas consumption. 

Looking farther out on the technological horizon, Li speculates in the paper that “when self-driving cars finally become real, our new simpler mechanism may also economize AI computational costs.” 

Li has no illusions about the resistance his recommendation may provoke. “You’re challenging people’s conventional wisdom. If there’s criticism, that’s to be expected. For example, some cops might not like this idea, because I’m taking away one of their income sources, even though there could be an overall gain to the whole society.” 

This paper is only one manifestation of what Li sees as a scholarly mission to apply novel perspectives – in this case, an economics viewpoint derived from game theory – to real-world problems, especially those that have been taken for granted for so long that they are not even recognized as problems. 

“Economics thinking should be applicable to a lot of different fields and improve our daily lives,” Li explains.  

What seems totally natural in one context, after all, may be foreign in another. Many countries–including China, where Li was born–don’t use four-way stop intersections. “If I grew up with these stop signs, I probably wouldn’t think about it,” he says. This is an example, Li suggests, of how diverse experiences and ideas imported via immigration can enrich host nations. Far from wanting the last word on the issue, Li is hoping to inspire wide-ranging conversation about how to change environments and communities for the better. 

“I would rather have the discussion ongoing and people give me ideas,” he says. “Only through debate will people understand it better.”