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

Giselle Moraes Ramos, Winnie Daamen and Serge Hoogendoorn

Transport Reviews, 2014, vol. 34, issue 1, 46-67

Abstract: Despite the wide use of utility theory to model travellers' behaviour, the interest in non-expected utility theories has increased due to their potential to capture more realistic behaviour. A main question raised is whether travellers are better described as utility maximizers or should be qualified differently.This paper presents a literature review on the use of expected utility theory (EUT), prospect theory (PT) and regret theory (RT) to model travellers' behaviour. Gaps in the literature are identified and a discussion about advantages and disadvantages of each theory is presented. A case study illustrates the differences between the theories.Under certain conditions, PT and RT restrict themselves to EUT. Their added value, however, is the possibility of capturing loss aversion, risk aversion and risk-seeking (PT) and regret aversion (RT). On the practical level, the use of EUT is well established, while contributions of PT and RT are marginal. On the theoretical level, however, RT seems to be (marginally) more suitable to model travellers' behaviour, while EUT and PT are equally suitable. This suggests that the large use of EUT is highly influenced by its very tractable framework. We do not claim the superiority of any theory, but propose to compare them through a systematic review.

Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://hdl.handle.net/10.1080/01441647.2013.856356 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:transr:v:34:y:2014:i:1:p:46-67

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/TTRV20

DOI: 10.1080/01441647.2013.856356

Access Statistics for this article

Transport Reviews is currently edited by Professor David Banister and Moshe Givoni

More articles in Transport Reviews from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().