IDEAS home Printed from https://ideas.repec.org/a/eee/transb/v42y2008i1p1-18.html
   My bibliography  Save this article

A Random Regret-Minimization model of travel choice

Author

Listed:
  • Chorus, Caspar G.
  • Arentze, Theo A.
  • Timmermans, Harry J.P.

Abstract

This paper presents an alternative to Random Utility-Maximization models of travel choice. Our Random Regret-Minimization model is rooted in Regret Theory and provides several useful features for travel demand analysis. Firstly, it allows for the possibility that choices between travel alternatives may be driven by the avoidance of negative emotions, rather than the maximization of some form of payoff. Secondly, it acknowledges that traveler decision-making in the context of multiattribute alternatives may not be fully compensatory. Besides this, we show how the Random Regret-Minimization approach is straightforwardly extended towards the case of risky travel choice, using the notion of Expected Regret. Finally, our Random Regret-Minimization model provides a straightforward and intuitive way to incorporate the notion that travelers, when faced with knowledge limitations, may wish to postpone their choice and search for more information first. The developed model is estimated on data from a multimodal travel simulator, where participants could choose between travel alternatives with risky travel times and costs, and the option of travel information acquisition. Estimation results support the validity of the proposed model of Random Regret-Minimization.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:transb:v:42:y:2008:i:1:p:1-18
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0191-2615(07)00055-0
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. David E. Bell, 1982. "Regret in Decision Making under Uncertainty," Operations Research, INFORMS, vol. 30(5), pages 961-981, October.
    2. Bhat, Chandra R., 2005. "A multiple discrete-continuous extreme value model: formulation and application to discretionary time-use decisions," Transportation Research Part B: Methodological, Elsevier, vol. 39(8), pages 679-707, September.
    3. Denant-Boèmont, L. & Petiot, R., 2003. "Information value and sequential decision-making in a transport setting: an experimental study," Transportation Research Part B: Methodological, Elsevier, vol. 37(4), pages 365-386, May.
    4. Sergiu Hart, 2013. "Adaptive Heuristics," World Scientific Book Chapters, in: Simple Adaptive Strategies From Regret-Matching to Uncoupled Dynamics, chapter 11, pages 253-287, World Scientific Publishing Co. Pte. Ltd..
    5. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, September.
    6. Quiggin, John, 1994. "Regret Theory with General Choice Sets," Journal of Risk and Uncertainty, Springer, vol. 8(2), pages 153-165, March.
    7. John D. Hey & Chris Orme, 2018. "Investigating Generalizations Of Expected Utility Theory Using Experimental Data," World Scientific Book Chapters, in: Experiments in Economics Decision Making and Markets, chapter 3, pages 63-98, World Scientific Publishing Co. Pte. Ltd..
    8. L. Denant-Boèmont & R. Petiot, 2003. "Information value and sequential decision-making in a transport setting: an experimental study," Post-Print hal-02422690, HAL.
    9. Brownstone, David & Bunch, David S. & Train, Kenneth, 2000. "Joint mixed logit models of stated and revealed preferences for alternative-fuel vehicles," Transportation Research Part B: Methodological, Elsevier, vol. 34(5), pages 315-338, June.
    10. Loomes, Graham & Sugden, Robert, 1982. "Regret Theory: An Alternative Theory of Rational Choice under Uncertainty," Economic Journal, Royal Economic Society, vol. 92(368), pages 805-824, December.
    11. Zeelenberg, M., 1999. "Anticipated regret, expected feedback and behavioral decision-making," Other publications TiSEM 38371d1b-31fd-45b0-860f-b, Tilburg University, School of Economics and Management.
    12. Recker, Wilfred W. & Golob, Thomas F., 1979. "A non-compensatory model of transportation behavior based on sequential consideration of attributes," Transportation Research Part B: Methodological, Elsevier, vol. 13(4), pages 269-280, December.
    13. J. Jeffrey Inman & James S. Dyer & Jianmin Jia, 1997. "A Generalized Utility Model of Disappointment and Regret Effects on Post-Choice Valuation," Marketing Science, INFORMS, vol. 16(2), pages 97-111.
    14. Daly, Andrew & Bierlaire, Michel, 2006. "A general and operational representation of Generalised Extreme Value models," Transportation Research Part B: Methodological, Elsevier, vol. 40(4), pages 285-305, May.
    15. Swait, Joffre, 2001. "A non-compensatory choice model incorporating attribute cutoffs," Transportation Research Part B: Methodological, Elsevier, vol. 35(10), pages 903-928, November.
    16. Cantillo, Víctor & Ortúzar, Juan de Dios, 2005. "A semi-compensatory discrete choice model with explicit attribute thresholds of perception," Transportation Research Part B: Methodological, Elsevier, vol. 39(7), pages 641-657, August.
    17. Loomes, Graham & Sugden, Robert, 1983. "A Rationale for Preference Reversal," American Economic Review, American Economic Association, vol. 73(3), pages 428-432, June.
    18. Machina, Mark J, 1987. "Choice under Uncertainty: Problems Solved and Unsolved," Journal of Economic Perspectives, American Economic Association, vol. 1(1), pages 121-154, Summer.
    19. 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.
    20. H C W L Williams, 1977. "On the Formation of Travel Demand Models and Economic Evaluation Measures of User Benefit," Environment and Planning A, , vol. 9(3), pages 285-344, March.
    21. Laurent Denant-Boemont & R. Petiot, 2003. "Information value and sequential decision-making in a transport setting: an experimental study," Post-Print halshs-02439268, HAL.
    22. 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.
    23. Brownston, David & Bunch, David S. & Train, Kenneth, 1999. "Joint mixed logit models of stated and revealed preferences for alternative-fuel vehicles," University of California Transportation Center, Working Papers qt7rf7s3nx, University of California Transportation Center.
    24. Loomes, Graham & Sugden, Robert, 1987. "Some implications of a more general form of regret theory," Journal of Economic Theory, Elsevier, vol. 41(2), pages 270-287, April.
    25. Arentze, Theo & Timmermans, Harry, 2007. "Parametric action decision trees: Incorporating continuous attribute variables into rule-based models of discrete choice," Transportation Research Part B: Methodological, Elsevier, vol. 41(7), pages 772-783, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Giselle Moraes Ramos & Winnie Daamen & Serge Hoogendoorn, 2014. "A State-of-the-Art Review: Developments in Utility Theory, Prospect Theory and Regret Theory to Investigate Travellers' Behaviour in Situations Involving Travel Time Uncertainty," Transport Reviews, Taylor & Francis Journals, vol. 34(1), pages 46-67, January.
    2. Tian, Qi & Zhao, Jinhua, 2018. "Regret Minimization in Decision Making: Implications for Choice Modeling and Policy Design," 2018 Annual Meeting, August 5-7, Washington, D.C. 274016, Agricultural and Applied Economics Association.
    3. Mara Thiene & Marco Boeri & Caspar Chorus, 2012. "Random Regret Minimization: Exploration of a New Choice Model for Environmental and Resource Economics," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(3), pages 413-429, March.
    4. Chorus, Caspar & van Cranenburgh, Sander & Dekker, Thijs, 2014. "Random regret minimization for consumer choice modeling: Assessment of empirical evidence," Journal of Business Research, Elsevier, vol. 67(11), pages 2428-2436.
    5. Carlos Laciana & Elke Weber, 2008. "Correcting expected utility for comparisons between alternative outcomes: A unified parameterization of regret and disappointment," Journal of Risk and Uncertainty, Springer, vol. 36(1), pages 1-17, February.
    6. Diecidue, Enrico & Somasundaram, Jeeva, 2017. "Regret theory: A new foundation," Journal of Economic Theory, Elsevier, vol. 172(C), pages 88-119.
    7. Sacha Bourgeois-Gironde, 2017. "How regret moves individual and collective choices towards rationality," Chapters, in: Morris Altman (ed.), Handbook of Behavioural Economics and Smart Decision-Making, chapter 11, pages 188-204, Edward Elgar Publishing.
    8. Qin, Jie, 2015. "A model of regret, investor behavior, and market turbulence," Journal of Economic Theory, Elsevier, vol. 160(C), pages 150-174.
    9. Kobi Kriesler & Shmuel Nitzan, 2009. "Framing-based Choice: A Model of Decision-making Under Risk," Korean Economic Review, Korean Economic Association, vol. 25, pages 65-89.
    10. Chi, Yichun & Zhuang, Sheng Chao, 2022. "Regret-based optimal insurance design," Insurance: Mathematics and Economics, Elsevier, vol. 102(C), pages 22-41.
    11. Zheng, Jiakun, 2021. "Willingness to pay for reductions in health risks under anticipated regret," Journal of Health Economics, Elsevier, vol. 78(C).
    12. Emmanuelle GABILLON, 2020. "When choosing is painful: anticipated regret and psychological opportunity cost," Bordeaux Economics Working Papers 2020-04, Bordeaux School of Economics (BSE).
    13. Eran Ben-Elia & Robert Ishaq & Yoram Shiftan, 2013. "“If only I had taken the other road...”: Regret, risk and reinforced learning in informed route-choice," Transportation, Springer, vol. 40(2), pages 269-293, February.
    14. Marc Willinger, 1990. "La rénovation des fondements de l'utilité et du risque," Revue Économique, Programme National Persée, vol. 41(1), pages 5-48.
    15. Andrea C. Hupman & Jay Simon, 2023. "The Legacy of Peter Fishburn: Foundational Work and Lasting Impact," Decision Analysis, INFORMS, vol. 20(1), pages 1-15, March.
    16. Jiakun Zheng, 2021. "Willingness to pay for reductions in health risks under anticipated regret," Post-Print hal-04227414, HAL.
    17. Han Bleichrodt & Alessandra Cillo & Enrico Diecidue, 2010. "A Quantitative Measurement of Regret Theory," Management Science, INFORMS, vol. 56(1), pages 161-175, January.
    18. Herweg, Fabian & Müller, Daniel, 2021. "A comparison of regret theory and salience theory for decisions under risk," Journal of Economic Theory, Elsevier, vol. 193(C).
    19. 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.
    20. Sunghoon Jang & Soora Rasouli & Harry Timmermans, 2018. "Accounting for cognitive effort in random regret-only models: Effect of attribute variation and choice set size," Environment and Planning B, , vol. 45(5), pages 842-863, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transb:v:42:y:2008:i:1:p:1-18. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/548/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.