Indifference bands for boundedly rational route switching

Recently published:


The replacement I-35W bridge in Minneapolis saw less traffic than the original bridge though it provided substantial travel time saving for many travelers. This observation cannot be explained by the classical route choice assumption that travelers always take the shortest path. Accordingly, a boundedly rational route switching model is proposed assuming that travelers will not switch to the new bridge unless travel time saving goes beyond a threshold or “indifference band”. Indifference bands are assumed to follow lognormal distribution and are estimated in two specifications: the first one assumes every driver’s indifference band is drawn from a population indifference band and the second one assumes that the mean of drivers’ indifference bands is a function of their own characteristics. Route choices of 78 subjects from a GPS travel behavior study were analyzed before and after the addition of the new I-35W bridge to estimate parameters. This study provides insights into empirical analysis of bounded rationality and sheds light on indifference band estimation using empirical data.


Bounded rationality Indifference band Empirical estimation GPS study Route choice