Travel time variability and rational inattention

Mogens Fosgerau; Gege Jiang

doi:10.1016/j.trb.2018.12.003

Travel time variability and rational inattention

Mogens Fosgerau, Gege Jiang^*

^*Corresponding author for this work

8 Citations (Scopus)

Abstract

This paper sets up a rational inattention model for the choice of departure time for a traveler facing random travel time. In this model, the traveler chooses in advance an information strategy for the travel time outcome, and then chooses departure time each day given the information received that day. The model describes how cheaper information allows the traveler to expand his/her consideration set and adapt more flexibly to changing conditions. This increases the traveler's payoff. The marginal cost of travel time variability is always positive. The ability to choose the information strategy reduces the cost of travel time variability compared to neoclassical travelers whose information is exogenously given.

Original language	English
Journal	Transportation Research Part B: Methodological
Volume	120
Pages (from-to)	1-14
Number of pages	14
ISSN	0191-2615
DOIs	https://doi.org/10.1016/j.trb.2018.12.003
Publication status	Published - 1 Feb 2019

Keywords

Discrete choice
Random travel time variability
Rational inattention
Value of reliability

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10.1016/j.trb.2018.12.003

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abstract = "This paper sets up a rational inattention model for the choice of departure time for a traveler facing random travel time. In this model, the traveler chooses in advance an information strategy for the travel time outcome, and then chooses departure time each day given the information received that day. The model describes how cheaper information allows the traveler to expand his/her consideration set and adapt more flexibly to changing conditions. This increases the traveler's payoff. The marginal cost of travel time variability is always positive. The ability to choose the information strategy reduces the cost of travel time variability compared to neoclassical travelers whose information is exogenously given.",

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AB - This paper sets up a rational inattention model for the choice of departure time for a traveler facing random travel time. In this model, the traveler chooses in advance an information strategy for the travel time outcome, and then chooses departure time each day given the information received that day. The model describes how cheaper information allows the traveler to expand his/her consideration set and adapt more flexibly to changing conditions. This increases the traveler's payoff. The marginal cost of travel time variability is always positive. The ability to choose the information strategy reduces the cost of travel time variability compared to neoclassical travelers whose information is exogenously given.

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KW - Random travel time variability

KW - Rational inattention

KW - Value of reliability

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JO - Transportation Research Part B: Methodological

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Travel time variability and rational inattention

Abstract

Keywords

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