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Travel Choice Inertia: The Joint Role of Risk Aversion and Learning

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  • Caspar G. Chorus
  • Benedict G. C. Dellaert

Abstract

This paper shows how travellers that are faced with a series of risky choices become behaviourally inert due to a combination of risk aversion and learning. Our theoretical analyses complement other studies that conceive inertia as resulting from the wish to save cognitive resources. We first present a model of risky travel mode choice. We show that if travellers dislike risk, and part of the quality of travel alternatives is only revealed upon usage, inertia emerges due to a learning-based lock-in effect. We extend our analyses to capture forward-looking behaviour and the provision of travel information. © 2012 LSE and the University of Bath

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Bibliographic Info

Article provided by London School of Economics and University of Bath in its journal Journal of Transport Economics and Policy (JTEP).

Volume (Year): 46 (2012)
Issue (Month): 1 (January)
Pages: 139-155

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Handle: RePEc:tpe:jtecpo:v:46:y:2012:i:1:p:139-155

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Web page: http://www.bath.ac.uk/e-journals/jtep

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  1. Chris Starmer, 2000. "Developments in Non-expected Utility Theory: The Hunt for a Descriptive Theory of Choice under Risk," Journal of Economic Literature, American Economic Association, vol. 38(2), pages 332-382, June.
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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, London School of Economics and University of Bath, vol. 42(1), pages 43-82, January.
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  10. Glenn Harrison & E. Rutström, 2009. "Expected utility theory and prospect theory: one wedding and a decent funeral," Experimental Economics, Springer, vol. 12(2), pages 133-158, June.
  11. Tommy Gärling & Kay Axhausen, 2003. "Introduction: Habitual travel choice," Transportation, Springer, vol. 30(1), pages 1-11, February.
  12. Simon, Herbert A, 1978. "Rationality as Process and as Product of Thought," American Economic Review, American Economic Association, vol. 68(2), pages 1-16, May.
  13. Xavier Gabaix & David Laibson & Guillermo Moloche & Stephen Weinberg, 2006. "Costly Information Acquisition: Experimental Analysis of a Boundedly Rational Model," American Economic Review, American Economic Association, vol. 96(4), pages 1043-1068, September.
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