Uncertainty Aversion and Its Role in Travel Decision Making Under Uncertainty

Zheng Li

International Journal of Strategic Decision Sciences (IJSDS), 2017, vol. 8, issue 1, 1-12

Abstract: Travel time variability is a random phenomenon, and within the presence of it, uncertainty is associated with decision making. When a choice is made in an uncertain situation, the probability distribution is based on the subjective judgments of a decision maker. This paper introduces a psychological perspective to the concept of travel time variability, by embedding a belief-based weighting, so as to better understand decision making under uncertainty. This research argues that a subjective probability approach accounting for degrees of belief should be addressed in order to capture the impact of travel time variability on decision making. Using a simulated choice data set, the author provides an example of modelling uncertainty aversion, and illustrate its impacts on model performance.

Date: 2017
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