An application of cumulative prospect theory to freeway drivers’ route choice behaviours

Jou, Rong-Chang; Chen, Ke‐Hong

doi:10.1016/j.tra.2013.01.011

Cited by 48 publications

(35 citation statements)

References 29 publications

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“…When faced with choices, the decision maker will pre-set a reference point to weigh the effectiveness of each option to judge its gains or losses [30], and the reference point reflects the person's psychological expectations [31]. Prospect theory provides a good description of the decision characteristics of people under uncertain conditions, which can be used to analyze the characteristics of travelers' choice behavior in various environments [32,33].…”

Section: Applicability Of Prospect Theory To Hsr Pricingmentioning

confidence: 99%

Differential Pricing Strategies of High Speed Railway Based on Prospect Theory: An Empirical Study from China

Qin

et al. 2019

Sustainability

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Based on the single pricing method of the high-speed railway (HSR) in China, a pricing strategy without flexibility leads to the problem of extreme fluctuations in passenger flow and difficulty in increasing revenue. In order to achieve sustainable development of the HSR from the perspective of pricing, in this study, we divided the passenger market according to the different factors affecting passengers' choice behavior, maximized ticket sales revenue with expected travel cost as the reference point, and used prospect theory to construct a differentiated pricing model under elastic demand. A simulated annealing algorithm was used to solve this model under two passenger flow intensities. Taking the Beijing-Shanghai corridor as an example for analysis, the results show that differential pricing can be implemented on the basis of passenger decision-making, and price reductions at off-peak periods will attract passenger flow which will increase ticket sales revenue by 10.41%. During the peak period, prices can be increased to maintain passenger flow, and ticket sales revenue will increase by 7.98%. We also found that increasing passenger expectations have a greater impact on ticket sales. This study provides theoretical and methodological support for the sustainable development of the HSR.

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Section: Applicability Of Prospect Theory To Hsr Pricingmentioning

confidence: 99%

Differential Pricing Strategies of High Speed Railway Based on Prospect Theory: An Empirical Study from China

Qin

et al. 2019

Sustainability

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show abstract

“…The effectiveness of advanced traveler information systems (ATIS) depends highly on travelers' behavior in response to real‐time information. It is well recognized that it is very important to indentify the factors that influence travelers' decision behavior under ATIS . Research results in this challenging field can facilitate better investment, design, and operation of ATIS technologies.…”

Section: Introductionmentioning

confidence: 99%

“…In the literature, many studies on travel behavior under ATIS exist. In terms of collecting data about traveler response to ATIS, many researchers used SP data from questionnaire surveys (e.g., ). Some other studies used SP data from travel simulator experiments (e.g., ).…”

Section: Introductionmentioning

confidence: 99%

Whether to enter expressway or not? The impact of new variable message sign information

Gan

2014

J of Advced Transportation

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SUMMARYThis study develops a random effect panel data logit model that identifies the factors that influence expressway users' decision behavior under a new arterial road variable message sign information service. The new information service provides travel time of both an expressway route and an alternate arterial road route. It is based on the data collected from a stated preference survey of Shanghai drivers. Correlations within repeated choices by the same respondent were addressed. The results show that the random effect model performs well in addressing repeated observations and evidences the existence of common unobserved random factors affecting route choice behaviors of the same respondent. It is shown that drivers' decisions can be significantly influenced by the new information service. Driving experience, travel time saving, and occurrence of expressway accidents serve as positive factors whereas number of traffic lights on the arterial road serves as a negative factor in choosing the arterial road. Private car drivers, employer-provided car drivers, and taxi drivers value number of traffic lights in a different way. Female drivers are more sensitive to expressway delays. Drivers with rich driving experience and female drivers are more sensitive to number of traffic lights.

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“…Liu et al For the practical research on CPT, the theory has been applied in numerous fields, including drivers' or travellers' route choice behaviours (Zhou, Xu, and Xu 2009;Jou and Chen 2013), traffic demand management (Schwanen and Ettema 2009;Liu et al 2010), construction project (Cattell, Bowen, and Kaka 2011;Cheng, Tsai, and Chuang 2011), insurance (Kaluszka and Krzeszowiec 2012), finance (Gurevich, Kliger, and Levy 2009;De Giorgi, Hens, and Rieger 2010), purchasing and supplier selection (Harrison, Moritz, and Pibernik 2009), and industrial design (Zhou and Jiao 2013). In particular, in the field of traffic behaviour and demand management, Zhou, Xu, and Xu (2009) conducted an investigation to construct a general travel decision-making rule by utilising CPT.…”

mentioning

confidence: 99%

“…In particular, in the field of traffic behaviour and demand management, Zhou, Xu, and Xu (2009) conducted an investigation to construct a general travel decision-making rule by utilising CPT. The perceptions of gains and losses of drivers in Taiwan were modelled using CPT (Jou and Chen 2013). CPT has also been used to cope with unreliable transportation when collecting children (Schwanen and Ettema 2009) and to define the cost of traffic demand management (Liu et al 2010).…”

mentioning

confidence: 99%

An order allocation model in multi-period logistics service supply chain based on cumulative prospect theory and capacity matching constraint

Liu

et al. 2014

International Journal of Production Research

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By considering a two-echelon supply chain that consists of a logistics service integrator (LSI) and several functional logistics service provider (FLSP), this study builds a comprehensive subjective utility (CSU) function of FLSP in multiperiod based on cumulative prospect theory and establishes an order allocation model in multi-period logistics service supply chain. This model considers three goals: to minimise the cost of LSI, to maximise the satisfaction of the FLSP and to maximise the capacity matching degree among different logistics capacities. This study uses an improved technique for order performance by similarity to ideal solution to obtain the optimal solution. A numerical example is given by software MATLAB 7.8. The effects of the behavioural parameters of FLSPs on order allocation are also discussed. When the LSI allocates orders, the FLSP, who has larger ratio of loss to gain range by the sensitivity decreasing rate, should be selected to obtain a large value of CSU. No obvious rule is found for the influence of the loss aversion coefficient of FLSPs on the CSU of FLSPs in a multi-period.

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An application of cumulative prospect theory to freeway drivers’ route choice behaviours

Cited by 48 publications

References 29 publications

Differential Pricing Strategies of High Speed Railway Based on Prospect Theory: An Empirical Study from China

Differential Pricing Strategies of High Speed Railway Based on Prospect Theory: An Empirical Study from China

Whether to enter expressway or not? The impact of new variable message sign information

An order allocation model in multi-period logistics service supply chain based on cumulative prospect theory and capacity matching constraint

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