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Abstract. The design of route guidance systems faces a well-known dilemma. The approach that theoretically yields the system-optimal traffic pattern may discriminate against some users in favor of others. Proposed alternate models, however, do not directly address the system perspective and may result in inferior performance. We propose a novel model and corresponding algorithms to resolve this dilemma. We present computational results on real-world instances and compare the new approach with the well-established traffic assignment model. The essence of this study is that system-optimal routing of traffic flow with explicit integration of user constraints leads to a better performance than the user equilibrium, while simultaneously guaranteeing superior fairness compared to the pure system optimum.

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