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The Impact of Information Availability on Destination Choice

Author

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  • A. de Palma

    (ENS Cachan - École normale supérieure - Cachan, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • François P. A. Combes

    (Cerema Direction Ouest - Centre d'Etudes et d'Expertise sur les Risques, l'Environnement, la Mobilité et l'Aménagement - Direction Ouest - Cerema - Centre d'Etudes et d'Expertise sur les Risques, l'Environnement, la Mobilité et l'Aménagement)

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

  • A. de Palma & François P. A. Combes, 2016. "The Impact of Information Availability on Destination Choice," Post-Print hal-01311122, HAL.
    • Handle: RePEc:hal:journl:hal-01311122
    DOI: 10.1111/jems.12152
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    References listed on IDEAS

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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.
    2. Simon P. Anderson & Regis Renault, 1999. "Pricing, Product Diversity, and Search Costs: A Bertrand-Chamberlin-Diamond Model," RAND Journal of Economics, The RAND Corporation, vol. 30(4), pages 719-735, Winter.
    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.
    5. Arentze, T.A. & Timmermans, H.J.P., 2005. "Information gain, novelty seeking and travel: a model of dynamic activity-travel behavior under conditions of uncertainty," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(2-3), pages 125-145.
    6. L. Eeckhoudt & C. Gollier & H. Schlesinger, 2005. "Economic and financial decisions under risk," Post-Print hal-00325882, HAL.
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    Keywords

    information; destination choice;

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