TY - JOUR
T1 - Revisiting reference point formation, gains-losses asymmetry and non-linear sensitivities with an emphasis on attribute specific treatment
AU - Stathopoulos, Amanda
AU - Hess, Stephane
N1 - Funding Information:
The present work was carried out during a visit by the first author to the Institute for Transport Studies at the University of Leeds early 2010. The authors are grateful to Andrew Daly for discussions on the modelling structure and to Marco Alderighi and Edoardo Marcucci and five anonymous referees at TRB’s annual meeting 2011 and referees of Transportation Research Part A for comments on an earlier draft that materially improved the paper. The first author acknowledges support from Trieste University in the form of a M.U.R. scholarship – Progetto Giovani Ricercatori. The second author acknowledges the support of the Leverhulme Trust in the form of a Leverhulme Early Career Fellowship.
PY - 2012/12
Y1 - 2012/12
N2 - In contrast with expected utility theory, empirical findings indicate that decision-makers are sensitive to departures from reference points rather than states. Several tests of the reference-dependent preference framework have been carried out in experimental economics, and to a smaller extent in a choice modelling setting, to date. However, these empirical applications have generally focussed on a single behavioural phenomenon using uniform modelling approaches. This paper aims to broaden existing work by presenting a multi-attribute framework, allowing contemporarily for gains-losses asymmetry, non-linearity and testing for several possible reference points. The framework is applied in the context of commuter choices and reveals important gains in model fit and further insights into behaviour compared to standard modelling approaches. Of particular relevance for future research is the functional form of fare sensitivity that varies significantly with the reference point used.
AB - In contrast with expected utility theory, empirical findings indicate that decision-makers are sensitive to departures from reference points rather than states. Several tests of the reference-dependent preference framework have been carried out in experimental economics, and to a smaller extent in a choice modelling setting, to date. However, these empirical applications have generally focussed on a single behavioural phenomenon using uniform modelling approaches. This paper aims to broaden existing work by presenting a multi-attribute framework, allowing contemporarily for gains-losses asymmetry, non-linearity and testing for several possible reference points. The framework is applied in the context of commuter choices and reveals important gains in model fit and further insights into behaviour compared to standard modelling approaches. Of particular relevance for future research is the functional form of fare sensitivity that varies significantly with the reference point used.
KW - Choice modeling
KW - Commuting
KW - Discrete choice experiment
KW - Gain/loss deviations
KW - Non-linearity
KW - Reference-dependence
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U2 - 10.1016/j.tra.2012.08.005
DO - 10.1016/j.tra.2012.08.005
M3 - Article
AN - SCOPUS:84867113938
SN - 0965-8564
VL - 46
SP - 1673
EP - 1689
JO - Transportation Research Part A: Policy and Practice
JF - Transportation Research Part A: Policy and Practice
IS - 10
ER -