IDEAS home Printed from https://ideas.repec.org/p/kud/kuiedp/1721.html
   My bibliography  Save this paper

Travel time variability and rational inattention

Author

Listed:
  • Mogens Fosgerau

    (Department of Economics, University of Copenhagen)

  • Gege Jiang

    (Department of Economics, Hong Kong University of Science and Technology)

Abstract

This paper sets up a rational inattention model for the choice of departure time for a traveler facing random travel time. The traveler chooses how much information to acquire about the travel time out-come before choosing departure time. This reduces the cost of travel time variability compared to models in which the information is exogenously fixed .

Suggested Citation

  • Mogens Fosgerau & Gege Jiang, 2017. "Travel time variability and rational inattention," Discussion Papers 17-21, University of Copenhagen. Department of Economics.
    • Handle: RePEc:kud:kuiedp:1721
    as

    Download full text from publisher

    File URL: http://www.econ.ku.dk/english/research/publications/wp/dp_2017/1721.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. De Borger, Bruno & Fosgerau, Mogens, 2012. "Information provision by regulated public transport companies," Transportation Research Part B: Methodological, Elsevier, vol. 46(4), pages 492-510.
    2. Farag, Sendy & Lyons, Glenn, 2012. "To use or not to use? An empirical study of pre-trip public transport information for business and leisure trips and comparison with car travel," Transport Policy, Elsevier, vol. 20(C), pages 82-92.
    3. Filip Matêjka & Alisdair McKay, 2015. "Rational Inattention to Discrete Choices: A New Foundation for the Multinomial Logit Model," American Economic Review, American Economic Association, vol. 105(1), pages 272-298, January.
    4. Mogens Fosgerau & Emerson Melo & André de Palma & Matthew Shum, 2020. "Discrete Choice And Rational Inattention: A General Equivalence Result," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(4), pages 1569-1589, November.
    5. Mogens Fosgerau, 2016. "The Valuation of Travel Time Variability," International Transport Forum Discussion Papers 2016/04, OECD Publishing.
    6. Fosgerau, Mogens & Engelson, Leonid, 2011. "The value of travel time variance," Transportation Research Part B: Methodological, Elsevier, vol. 45(1), pages 1-8, January.
    7. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1999. "Information and time-of-usage decisions in the bottleneck model with stochastic capacity and demand," European Economic Review, Elsevier, vol. 43(3), pages 525-548, March.
    8. Tseng, Yin-Yen & Verhoef, Erik T., 2008. "Value of time by time of day: A stated-preference study," Transportation Research Part B: Methodological, Elsevier, vol. 42(7-8), pages 607-618, August.
    9. Hebert, Benjamin & Woodford, Michael, 2017. "Rational Inattention with Sequential Information Sampling," Research Papers repec:ecl:stabus:3457, Stanford University, Graduate School of Business.
    10. Lindsey, Robin & Daniel, Terry & Gisches, Eyran & Rapoport, Amnon, 2014. "Pre-trip information and route-choice decisions with stochastic travel conditions: Theory," Transportation Research Part B: Methodological, Elsevier, vol. 67(C), pages 187-207.
    11. Engelson, Leonid & Fosgerau, Mogens, 2016. "The cost of travel time variability: Three measures with properties," Transportation Research Part B: Methodological, Elsevier, vol. 91(C), pages 555-564.
    12. Erel Avineri & Joseph Prashker, 2006. "The Impact of Travel Time Information on Travelers’ Learning under Uncertainty," Transportation, Springer, vol. 33(4), pages 393-408, July.
    13. Xiao, Yu & Lo, Hong K., 2016. "Day-to-day departure time modeling under social network influence," Transportation Research Part B: Methodological, Elsevier, vol. 92(PA), pages 54-72.
    14. Fosgerau, Mogens & Karlström, Anders, 2010. "The value of reliability," Transportation Research Part B: Methodological, Elsevier, vol. 44(1), pages 38-49, January.
    15. Rapoport, Amnon & Gisches, Eyran J. & Daniel, Terry & Lindsey, Robin, 2014. "Pre-trip information and route-choice decisions with stochastic travel conditions: Experiment," Transportation Research Part B: Methodological, Elsevier, vol. 68(C), pages 154-172.
    16. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-260, May.
    17. Small, Kenneth A, 1982. "The Scheduling of Consumer Activities: Work Trips," American Economic Review, American Economic Association, vol. 72(3), pages 467-479, June.
    18. Fosgerau, Mogens & Melo, Emerson & Shum, Matt, 2017. "Discrete Choice and Rational Inattention: a General Equivalence Result�," MPRA Paper 76605, University Library of Munich, Germany.
    19. Sims, Christopher A., 2003. "Implications of rational inattention," Journal of Monetary Economics, Elsevier, vol. 50(3), pages 665-690, April.
    20. Bifulco, Gennaro N. & Cantarella, Giulio E. & Simonelli, Fulvio & Velonà, Pietro, 2016. "Advanced traveller information systems under recurrent traffic conditions: Network equilibrium and stability," Transportation Research Part B: Methodological, Elsevier, vol. 92(PA), pages 73-87.
    21. Sims, Christopher A., 2010. "Rational Inattention and Monetary Economics," Handbook of Monetary Economics, in: Benjamin M. Friedman & Michael Woodford (ed.), Handbook of Monetary Economics, edition 1, volume 3, chapter 4, pages 155-181, Elsevier.
    22. Yang, Hai, 1998. "Multiple equilibrium behaviors and advanced traveler information systems with endogenous market penetration," Transportation Research Part B: Methodological, Elsevier, vol. 32(3), pages 205-218, April.
    23. Eran Ben-Elia & Erel Avineri, 2015. "Response to Travel Information: A Behavioural Review," Transport Reviews, Taylor & Francis Journals, vol. 35(3), pages 352-377, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. Engelson, Leonid & Fosgerau, Mogens, 2020. "Scheduling preferences and the value of travel time information," Transportation Research Part B: Methodological, Elsevier, vol. 134(C), pages 256-265.
    3. Melvin Wong & Bilal Farooq, 2019. "Information processing constraints in travel behaviour modelling: A generative learning approach," Papers 1907.07036, arXiv.org, revised Jul 2019.
    4. 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.
    5. 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).
    6. 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.
    7. 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.
    8. 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.
    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.

    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. 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.
    2. Engelson, Leonid & Fosgerau, Mogens, 2020. "Scheduling preferences and the value of travel time information," Transportation Research Part B: Methodological, Elsevier, vol. 134(C), pages 256-265.
    3. 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.
    4. Xiao, Yu & Coulombel, Nicolas & Palma, André de, 2017. "The valuation of travel time reliability: does congestion matter?," Transportation Research Part B: Methodological, Elsevier, vol. 97(C), pages 113-141.
    5. 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.
    6. 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.
    7. Kenneth Small, 2015. "The Bottleneck Model: An Assessment and Interpretation," Working Papers 141506, University of California-Irvine, Department of Economics.
    8. Nicolas Coulombel & André de Palma, 2014. "The marginal social cost of travel time variability," Post-Print hal-01100105, HAL.
    9. Yu, Xiaojuan & van den Berg, Vincent A.C. & Li, Zhi-Chun, 2023. "Congestion pricing and information provision under uncertainty: Responsive versus habitual pricing," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 175(C).
    10. André de Palma & Mogens Fosgerau, 2011. "Dynamic Traffic Modeling," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 9, Edward Elgar Publishing.
    11. André de Palma & Mogens Fosgerau, 2010. "Dynamic and Static congestion models: A review," Working Papers hal-00539166, HAL.
    12. Small, Kenneth A., 2015. "The bottleneck model: An assessment and interpretation," Economics of Transportation, Elsevier, vol. 4(1), pages 110-117.
    13. Small, Kenneth A., 2012. "Valuation of travel time," Economics of Transportation, Elsevier, vol. 1(1), pages 2-14.
    14. Börjesson, Maria & Eliasson, Jonas & Franklin, Joel, 2012. "Valuations of travel time variability in scheduling versus mean-variance models," Working papers in Transport Economics 2012:2, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    15. Xiao, Yu & Fukuda, Daisuke, 2015. "On the cost of misperceived travel time variability," Transportation Research Part A: Policy and Practice, Elsevier, vol. 75(C), pages 96-112.
    16. Carrion, Carlos & Levinson, David, 2012. "Value of travel time reliability: A review of current evidence," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(4), pages 720-741.
    17. Zhaoqi Zang & Richard Batley & Xiangdong Xu & David Z. W. Wang, 2022. "On the value of distribution tail in the valuation of travel time variability," Papers 2207.06293, arXiv.org, revised Dec 2023.
    18. Engelson, Leonid & Fosgerau, Mogens, 2011. "Additive measures of travel time variability," Transportation Research Part B: Methodological, Elsevier, vol. 45(10), pages 1560-1571.
    19. Zhu, Zheng & Li, Xinwei & Liu, Wei & Yang, Hai, 2019. "Day-to-day evolution of departure time choice in stochastic capacity bottleneck models with bounded rationality and various information perceptions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 131(C), pages 168-192.
    20. Habib, Khandker Nurul, 2023. "Rational inattention in discrete choice models: Estimable specifications of RI-multinomial logit (RI-MNL) and RI-nested logit (RI-NL) models," Transportation Research Part B: Methodological, Elsevier, vol. 172(C), pages 53-70.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:kud:kuiedp:1721. 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: Thomas Hoffmann (email available below). General contact details of provider: https://edirc.repec.org/data/okokudk.html .

    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.