The new system, described in the journal Transportation Science, is based on a study of traffic in Lausanne, Switzerland.
Existing software for timing traffic signals has several limitations, said Carolina Osorio, an assistant professor of civil and environmental engineering at Massachusetts Institute of Technology (MIT) and lead author of the study.
"Usually in practice, when you want to time traffic lights, traditionally it's been done in a local way," Osorio said.
"You define one intersection, or maybe a set of intersections along an arterial, and you fine-tune or optimise the traffic lights there.
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The new system developed by Osorio and graduate student Linsen Chong can time traffic lights in large urban areas while accounting for the complex and diverse reactions of individual drivers.
Their approach uses high-resolution traffic simulators that describe, in detail, the behaviour of drivers in response to changes in travel conditions.