 State-dependent congestion pricing with reference-dependent preferencesTransportation Research Part B: Methodological, 2011, vol. 45, issue 10, 1501-1526 Abstract: Demand and capacity fluctuations are common for roads and other congestible facilities. With ongoing advances in pricing technology and ways of communicating information to prospective users, state-dependent congestion pricing is becoming practical. But it is still rare or nonexistent in many potential applications. One explanation is that people dislike uncertainty about how much they will pay. To explore this idea, a model of reference-dependent preferences is developed based on Köszegi and Rabin (2006). Using a facility yields an “intrinsic” utility and a “gain–loss” utility measured relative to the probability distribution over states of utility outcomes. Two types of preferences are analyzed: bundled preferences in which gains and losses are perceived for overall utility, and unbundled preferences in which gains and losses are perceived separately for the toll and other determinants of utility. Keywords: Congestion pricing; State-dependent pricing; Reference-dependent preferences (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:transb:v:45:y:2011:i:10:p:1501-1526 Ordering information: This journal article can be ordered from DOI: 10.1016/j.trb.2011.06.003 Access Statistics for this article Transportation Research Part B: Methodological is currently edited by Fred Mannering More articles in Transportation Research Part B: Methodological from Elsevier |
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