Misinformation and Misperception in the market for parking

Abstract

This article studies the level of knowledge and information held by drivers in the car parking market. By drawing on a survey conducted with 576 garage customers in Barcelona, we provide new evidence on the market frictions produced by the misinformation and misperception of drivers searching for parking spaces. We identify the factors that aggravate/mitigate misinformation and misperception, and examine how they affect the functioning of the parking market, damaging market competition, undermining effective regulatory actions and exacerbating negative externalities. Our evidence shows that drivers’ misperceptions increase cruising-for-parking and its consequences: congestion, pollution and accidents.