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Travel time variability and rational inattention

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  • Fosgerau, Mogens
  • Jiang, Gege

Abstract

This paper sets up a rational inattention model for the choice of departure time for a traveler facing random travel time. In this model, the traveler chooses in advance an information strategy for the travel time outcome, and then chooses departure time each day given the information received that day. The model describes how cheaper information allows the traveler to expand his/her consideration set and adapt more flexibly to changing conditions. This increases the traveler's payoff. The marginal cost of travel time variability is always positive. The ability to choose the information strategy reduces the cost of travel time variability compared to neoclassical travelers whose information is exogenously given.

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  • Fosgerau, Mogens & Jiang, Gege, 2019. "Travel time variability and rational inattention," Transportation Research Part B: Methodological, Elsevier, vol. 120(C), pages 1-14.
    • Handle: RePEc:eee:transb:v:120:y:2019:i:c:p:1-14
    DOI: 10.1016/j.trb.2018.12.003
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    Cited by:

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    2. Melvin Wong & Bilal Farooq, 2019. "Information processing constraints in travel behaviour modelling: A generative learning approach," Papers 1907.07036, arXiv.org, revised Jul 2019.
    3. Li, Tianhao & Chen, Peng & Tian, Ye, 2021. "Personalized incentive-based peak avoidance and drivers’ travel time-savings," Transport Policy, Elsevier, vol. 100(C), pages 68-80.
    4. Li, Manzi & Jiang, Gege & Lo, Hong K., 2022. "Pricing strategy of ride-sourcing services under travel time variability," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 159(C).
    5. Austin Knies & Jorge Lorca & Emerson Melo, 2020. "A Recursive Logit Model with Choice Aversion and Its Application to Transportation Networks," Papers 2010.02398, arXiv.org, revised Oct 2021.
    6. Zhaoqi Zang & Xiangdong Xu & Kai Qu & Ruiya Chen & Anthony Chen, 2022. "Travel time reliability in transportation networks: A review of methodological developments," Papers 2206.12696, arXiv.org, revised Jul 2022.
    7. Han, Xiao & Yu, Yun & Gao, Zi-You & Zhang, H. Michael, 2021. "The value of pre-trip information on departure time and route choice in the morning commute under stochastic traffic conditions," Transportation Research Part B: Methodological, Elsevier, vol. 152(C), pages 205-226.
    8. Marra, Alessio Daniele & Corman, Francesco, 2020. "Determining an efficient and precise choice set for public transport based on tracking data," Transportation Research Part A: Policy and Practice, Elsevier, vol. 142(C), pages 168-186.
    9. Jiang, Gege & Fosgerau, Mogens & Lo, Hong K., 2020. "Route choice, travel time variability, and rational inattention," Transportation Research Part B: Methodological, Elsevier, vol. 132(C), pages 188-207.
    10. Li, Zhi-Chun & Huang, Hai-Jun & Yang, Hai, 2020. "Fifty years of the bottleneck model: A bibliometric review and future research directions," Transportation Research Part B: Methodological, Elsevier, vol. 139(C), pages 311-342.
    11. Knies, Austin & Lorca, Jorge & Melo, Emerson, 2022. "A recursive logit model with choice aversion and its application to transportation networks," Transportation Research Part B: Methodological, Elsevier, vol. 155(C), pages 47-71.
    12. Fu, Jianhua & Zhang, Yongqing, 2020. "Valuation of travel time reliability: Considering the traveler's adaptive expectation with an indifference band on daily trip duration," Transportation Research Part A: Policy and Practice, Elsevier, vol. 140(C), pages 337-353.

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    More about this item

    Keywords

    Rational inattention; Random travel time variability; Value of reliability; Discrete choice;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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