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Information value and sequential decision-making in a transport setting: an experimental study

Author

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  • L. Denant-Boèmont

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

  • R. Petiot

    (LET - Laboratoire d'économie des transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique, ENTPE - École Nationale des Travaux Publics de l'État - ENTPE - École Nationale des Travaux Publics de l'État - Ministère de l'Ecologie, du Développement Durable, des Transports et du Logement)

Abstract

In economic models of dynamic choice under uncertainty, the ''information value'' is the highest price an individual is willing to pay for information. This amount usually increases as information becomes more specific. Applying experimental economics an experimental game has been constructed in which individuals choose between alternative congested transport modes to try to arrive at a destination at a specified time. To reduce the risk associated with modal choice, each subject can buy information about traffic levels. Two information messages are offered one after the other, the second giving more information. The results show the value individuals ascribe to information in a context of increasing information where information is not free, and the price of information price and infrastructure capacities vary. Individuals compare the utility of information to its cost and this calculation is an important part of the comparison between risk with regard to travel time and the monetary travel cost. Moreover, individuals choose to buy information when the variance of payoffs for the chosen route is sufficiently high. The paper shows that the economic model of dynamic choice seems to provide a reasonable approximation of individual values. In particular, the willingness to pay for more detailed information is higher than for more general information. Finally, it shows how an experimental economics technique can produce empirical data to test theoretical models dealing with transport behavior.

Suggested Citation

  • L. Denant-Boèmont & R. Petiot, 2003. "Information value and sequential decision-making in a transport setting: an experimental study," Post-Print hal-02422690, HAL.
    • Handle: RePEc:hal:journl:hal-02422690
    DOI: 10.1016/S0191-2615(02)00018-8
    Note: View the original document on HAL open archive server: https://univ-perp.hal.science/hal-02422690v1
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    References listed on IDEAS

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    3. Anthony Ziegelmeyer & Frédéric Koessler & Kene Boun My & Laurent Denant-Boèmont, 2008. "Road Traffic Congestion and Public Information: An Experimental Investigation," Journal of Transport Economics and Policy, University of Bath, vol. 42(1), pages 43-82, January.
    4. Soora Rasouli & Harry J P Timmermans, 2014. "Uncertain Travel Times and Activity Schedules under Conditions of Space-Time Constraints and Invariant Choice Heuristics," Environment and Planning B, , vol. 41(6), pages 1022-1030, December.
    5. Ruihua Lu & Caspar Chorus & Bert van Wee, 2014. "Travelers' Use of ICT under Conditions of Risk and Constraints: An Empirical Study Based on Stated and Induced Preferences," Environment and Planning B, , vol. 41(5), pages 928-944, October.
    6. Eboli, Laura & Mazzulla, G., 2008. "Willingness-to-pay of public transport users for improvement in service quality," European Transport \ Trasporti Europei, ISTIEE, Institute for the Study of Transport within the European Economic Integration, issue 38, pages 107-118.
    7. Caspar Chorus & Theo Arentze & Harry Timmermans, 2007. "Information impact on quality of multimodal travel choices: conceptualizations and empirical analyses," Transportation, Springer, vol. 34(6), pages 625-645, November.
    8. Chorus, Caspar G. & Arentze, Theo A. & Molin, Eric J.E. & Timmermans, Harry J.P. & Van Wee, Bert, 2006. "The value of travel information: Decision strategy-specific conceptualizations and numerical examples," Transportation Research Part B: Methodological, Elsevier, vol. 40(6), pages 504-519, July.
    9. Chorus, Caspar G. & Arentze, Theo A. & Timmermans, Harry J.P., 2008. "A Random Regret-Minimization model of travel choice," Transportation Research Part B: Methodological, Elsevier, vol. 42(1), pages 1-18, January.
    10. Wijayaratna, Kasun P. & Dixit, Vinayak V., 2016. "Impact of information on risk attitudes: Implications on valuation of reliability and information," Journal of choice modelling, Elsevier, vol. 20(C), pages 16-34.
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