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Scheduling choices under rank dependent utility maximization

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Abstract

Rank dependent utility maximization is applied in maximizing a linear and a quadratic scheduling model considering a subjective weighting over uncertain outcomes. The optimal departure time and maximal utility are different from that under expect utility maximization in the transformed travel time density function. Probability weighting is found when estimating the linear model and the estimated weighting function suggests optimism behaviour of respondents. The results also reveal the evidence of heterogeneity in scheduling preferences. Moreover, evidence for the variable of excessive travel time beyond the traditional scheduling model specification is found even with controlling for probability weighting. Our results also show no empirical equivalence between the scheduling model and its derived forms.

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  • Wang, Qian & Sundberg, Marcus & Karlström, Anders, 2013. "Scheduling choices under rank dependent utility maximization," Working papers in Transport Economics 2013:16, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
  • Handle: RePEc:hhs:ctswps:2013_016 Note: The abstract of this paper has been presented at the 1st European Symposium on Quantitative Methods in Transportation Systems (LATSIS) 2012 Sep. The full paper has been presented on Euro Working Group on Transportation (EWGT) 2013 Sep., and a compact version of this paper has been submitted to EWGT2013 proceeding: Elsevier Procedia - Social and Behavioral Sciences
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    References listed on IDEAS

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    1. Diecidue, Enrico & Wakker, Peter P, 2001. "On the Intuition of Rank-Dependent Utility," Journal of Risk and Uncertainty, Springer, vol. 23(3), pages 281-298, November.
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    Keywords

    Scheduling models; Rank dependent utility; Risk attitudes; Heterogeneity;

    JEL classification:

    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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