Sweden's Traffic Switch as a Shift Between Equilibria
The 1967 change in Sweden from left-hand to right-hand traffic exemplifies a shift from one stable equilibrium to another. Before the switch, driving on the left was a self-perpetuating norm because it was in every driver's interest to conform. After the coordinated change, driving on the right became the new equilibrium, as individuals now had a clear incentive to adopt the new convention followed by everyone else.
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Introduction to Macroeconomics Course
Ch.8 Economic dynamics: Financial and environmental crises - The Economy 2.0 Macroeconomics @ CORE Econ
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Sweden's Traffic Switch as a Shift Between Equilibria
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True or False: In the context of Sweden's 1967 traffic switch, the pre-existing convention of driving on the left was an unstable situation that would have likely corrected itself over time without a coordinated, nationwide change.
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Imagine that one week after Sweden's successful 1967 switch to right-hand traffic, a single driver decides to revert to the old habit of driving on the left side of a busy road. From a strategic perspective, what is the most significant consequence for this individual driver?
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Match each conceptual term with its correct description in the context of Sweden's 1967 switch from left-hand to right-hand traffic.
In 1967, Sweden successfully switched from left-hand to right-hand traffic with a single, coordinated, nationwide change. Suppose an alternative plan had been proposed: a gradual, city-by-city transition over several years. From a strategic interaction standpoint, what is the most critical flaw in this gradual approach?
A country successfully orchestrates a nationwide, overnight switch from one side of the road to the other for all traffic. This change requires everyone to adopt the new behavior simultaneously to avoid chaos. Which of the following scenarios best exemplifies the same fundamental challenge of shifting from one stable, self-enforcing convention to another?
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