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The Impact of Information Availability on Destination Choice

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  • F. Combes
  • A. De Palma

Abstract

Consider a population of agents who choose one among a set of destinations located along a rectilinear road. Each of these destinations has a certain utility, modeled by a random variable. We compare a situation where the agents have to explore the destinations to observe the value of their utilities, to a situation where they know these values beforehand. We show that more information yields a higher welfare to the agents, and also, perhaps counter‐intuitively, higher distance traveled.

Suggested Citation

  • F. Combes & A. De Palma, 2016. "The Impact of Information Availability on Destination Choice," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 25(3), pages 678-687, September.
    • Handle: RePEc:bla:jemstr:v:25:y:2016:i:3:p:678-687
    DOI: 10.1111/jems.12152
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    1. André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), 2011. "A Handbook of Transport Economics," Books, Edward Elgar Publishing, number 12679.
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    3. André de Palma & Robin Lindsey & Emile Quinet & Robert Vickerman, 2011. "Handbook Of Transport Economics," PSE-Ecole d'économie de Paris (Postprint) halshs-00754912, HAL.
    4. André de Palma & Nathalie Picard, 2006. "Equilibria and Information Provision in Risky Networks with Risk-Averse Drivers," Transportation Science, INFORMS, vol. 40(4), pages 393-408, November.
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    6. L. Eeckhoudt & C. Gollier & H. Schlesinger, 2005. "Economic and financial decisions under risk," Post-Print hal-00325882, HAL.
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