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Selfishness and altruism in the distribution of travel time and income

  • Nebiyou Tilahun

    ()

  • David Levinson

    ()

Most economic models assume that individuals act out their preferences based on self-interest alone. However, there have also been other paradigms in economics that aim to capture aspects of behavior that include fairness, reciprocity, and altruism. In this study we empirically examine preferences of travel time and income distributions with and without the respondent knowing their own position in each distribution. The data comes from a Stated Preference experiment where subjects were presented paired alternative distributions of travel time and income. The alternatives require a tradeoff between distributional concerns and the respondent’s own position. Choices also do not penalize or reward any particular choice. Overall, choices show individuals are willing forgo alternatives where they would be individually well off in the interest of distributional concerns in both the travel time and income cases. Exclusively self-interested choices are seen more in the income questions, where nearly 25 % of respondents express such preferences, than in the travel time case, where only 5 % of respondents make such choices. The results also suggest that respondents prioritize their own position differently relative to regional distributions of travel time and income. Estimated choice models show that when it comes to travel time, individuals are more concerned with societal average travel time followed by the standard deviation in the region and finally their own travel time, while in the case of income they are more concerned with their own income, followed by a desire for more variability, and finally increasing the minimum income in their region. When individuals do not know their fate after a policy change that affects regional travel time, their choices appear to be mainly motivated by risk averse behavior and aim to reduce variability in outcomes. On the other hand, in the income context, the expected value appears to drive choices. In all cases, population-wide tastes are also estimated and reported. Copyright Springer Science+Business Media New York 2013

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File URL: http://hdl.handle.net/10.1007/s11116-013-9456-7
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Article provided by Springer in its journal Transportation.

Volume (Year): 40 (2013)
Issue (Month): 5 (September)
Pages: 1043-1061

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Handle: RePEc:kap:transp:v:40:y:2013:i:5:p:1043-1061
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=103007

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  1. Matthew Rabin., 1992. "Incorporating Fairness into Game Theory and Economics," Economics Working Papers 92-199, University of California at Berkeley.
  2. Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
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  12. Lei Zhang & David Levinson, 2005. "Balancing Efficiency and Equity of Ramp Meters," Working Papers 200508, University of Minnesota: Nexus Research Group.
  13. Marchetti, Antonella & Castelli, Ilaria & Harlé, Katia M. & Sanfey, Alan G., 2011. "Expectations and outcome: The role of Proposer features in the Ultimatum Game," Journal of Economic Psychology, Elsevier, vol. 32(3), pages 446-449, June.
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