Economic Constrains for the Utilisation of the Safety Potential of Future Vehicle-to-Vehicle (C2C) Communication Technologies

This paper describes how, despite the great success in the last 30 years, passive safety systems are reaching a limit in improving vehicle safety. Fundamental enhancement of passenger protection can only be achieved by including predictive vehicle-to-vehicle (V2V) communication technologies in the future. This paper analyzes the potential risks for market implementation and penetration of these new technologies from a theoretical network economics point of view. Additional empirical data analysis for already established car safety systems is done to generate further findings. From an economic point of view the author of this paper assumes that vehicle-to-vehicle communication is generating positive externalities. Furthermore, production of the respective communication equipment is characterized by economies of scale in production. The overall question of this examination is to analyze whether the risk of market failure is that strong that public regulation is necessary. The implementation process of vehicle-to-vehicle communication technologies shows many economic effects that are very well known in network economic literature. The most obvious one is the need to reach a critical mass of car owners who can adopt the new technologies within a relatively short time. Otherwise, it is very difficult to generate the full benefit of the car V2V communication systems. The full benefit means to increase the safety on the roads so significantly that consumers were willing to pay for V2V equipment and to adopt these new technologies. Because of this network effect it will be very difficult to reach an efficient market solution without public intervention. Some possible solutions could be subsidies at the beginning or a regional differentiated implementation.


  • English

Media Info

  • Media Type: Digital/other
  • Pagination: v.p.
  • Monograph Title: European Transport Conference, 2010 Proceedings

Subject/Index Terms

Filing Info

  • Accession Number: 01352986
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Sep 29 2011 12:05PM