Expected Utility Theory, Prospect Theory, and Regret Theory Compared for Prediction of Route Choice Behavior

Abstract

Various decision theories have been used to explain travelers' behavior. This paper presents a comparative analysis from the points of view of theory and application of the expected utility theory, prospect theory, and regret theory. The application was based on an empirical data set on route choice behavior with and without information provision. Results show that despite the widespread use of expected utility theory to model travelers' behavior, the use of prospect theory is quite appropriate and promising, especially when information is provided. The reference point plays an important role in the prediction ability of prospect theory. The greatest prediction ability occurs when the reference point is aligned with the observed behavior and thus reinforces the necessity of establishing appropriate and meaningful values. This study empirically shows the potential of alternatives to expected utility theory to capture travelers' behavior better, as in the case of prospect theory under the proposed model specification, but this is not necessarily true, as demonstrated by the results obtained by use of regret theory.

Incorporating psycho-physical mapping into random regret choice models: model specifications and empirical performance assessments

“…In search of alternative behavioral foundations of choice models, the concept of regret has recently attracted the attention of several scholars in transportation research (Chorus et al 2008a, b;Chorus 2010;De Moraes Ramos et al 2011;Hess et al 2012;Chorus 2012aChorus , 2012bKaplan and Prato 2012;Chorus and Bierlaire 2013;Chorus et al 2013b;Hensher et al 2013;Boeri and Masiero 2014;Chorus 2014a, b;Prato 2014;Rasouli and Timmermans 2015a). Regret relates to an affective state of mind that individuals may experience or anticipate once they realize that one or more of the non-chosen choice alternatives outperform the chosen alternative on one or more attributes of interest.…”

“…This fundamental work has led to an upsurge of applications of regret-based models, and extensions of the model under both certain conditions (Chorus et al 2008a, b;Chorus and de Jong 2011;Chorus 2012b;Kaplan and Prato 2012;Beck et al 2013;Chorus 2014a;Hensher et al 2013;Masiero 2014, Prato 2014), and uncertain conditions (Chorus et al 2008a;De Moraes Ramos et al 2011;Chorus 2014b). Regret-based models seem to be more important when respondents are less familiar with the choice situation (probably because they have less defined preferences) .…”

Research on Commuting Travel Mode Choice of Car Owners Considering Return Trip Containing Activities

“…They concluded that although prospect theory remains controversial, the results show that it is suitable for the prediction of travel route choice behavior, especially when the uncertainty in the trip turns into a certain probability. This study indicates that prospect theory can replace expected utility theory to capture travel behaviors better [4]. Mi Jun (2015) studied travel mode choice behavior based on prospect theory, comparing the results of travel mode choice based on expected utility theory and prospect theory.…”

Error distributions assumptions in random regret choice models: towards error Frechit specifications

“…After their introduction, applications of random regret choice models have almost invariably adopted the assumption of independently and identically distributed error terms (e.g. Chorus, Arentze, and Timmermans 2009;De Moraes Ramos, Daamen, and Hoogendoorn 2011;Kaplan and Prato 2012;Beck et al 2013;Chorus, Van Cranenburgh, and Dekker 2014;Hess, Beck, and Chorus 2014;Leong and Hensher 2015;Sharma, Hickman, and Nassir 2017;Li et al 2018). Consequently, most applications involve Equation (5) in combination with Equation 2; a few studies explored taste variation (e.g.…”