Equilibria and Information Provision in Risky Networks with Risk-Averse Drivers

  • Authors:

  • André de Palma;Nathalie Picard

  • Affiliations:

  • THEMA, Université de Cergy-Pontoise, 33 Boulevard du Port, 95011 Cergy-Pontoise cedex, France, and École Nationale des Ponts et Chaussées, 28 rue des Saint-Pères, 75343 Paris c ...;THEMA, Université de Cergy-Pontoise, 33 Boulevard du Port, 95011 Cergy-Pontoise cedex, France, and Institut National des Études Démographiques, 133 Boulevard Davout, 75980 Paris ced ...

  • Venue:
  • Transportation Science
  • Year:
  • 2006

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Abstract

We study the impact of information on risk-averse drivers who maximize their expected utility (rather than minimizing expected travel time). For two routes in parallel with risky travel time, we show that equilibrium travel times depend on the distribution of risk aversion as well as on provision of information. Besides the mean variance model used so far in transportation, we consider three other standard utility functions. Interestingly, we find that optimal route choice may depend on global factors such as the length of the journey. Finally, we study the benefit of information according to the level of risk aversion.