RiskyWeighting.pdf (446.67 kB)
Risky weighting in discrete choice
This paper presents a new approach to discrete choice analysis for risky prospects. Conventional discrete choice analysis focuses on riskless prospects and does not deal with the scenario where the alternatives that the decision-makers choose from are associated with risk. In this paper, we investigate decision-makers’ risk perception and choice behaviour in choice experiments when they are facing several risky prospects. We propose a broad class of cumulative risky weighting functions, upon which a unified cumulative risky weighting function is developed. We show that this unified cumulative risky weighting function includes several existing cumulative risky weighting functions as special cases. We then develop a multivariate method for choice analysis with risky prospects to account for decision-makers’ individual-specific risk perception and the impact of various factors on the value function respectively. We illustrate the developed method using an empirical study on road tolling in Australia.
History
School
- Business and Economics
Department
- Business
Published in
Transportation Research Part B: MethodologicalVolume
102Pages
1 - 21 (21)Citation
LI, B. and HENSHER, D.A., 2017. Risky weighting in discrete choice. Transportation Research Part B: Methodological, 102, pp. 1-21.Publisher
© ElsevierVersion
- AM (Accepted Manuscript)
Publisher statement
This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/Acceptance date
2017-04-25Publication date
2017-05-16Copyright date
2017Notes
This paper was published in the journal Transportation Research Part B: Methodological and the definitive published version is available at https://doi.org/10.1016/j.trb.2017.04.014.ISSN
0191-2615Publisher version
Language
- en