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Book part
Publication date: 31 January 2015

Stephane Hess and Caspar G. Chorus

This chapter proposes a new mixture model which allows for heterogeneity in sensitivities and decision rules across decision makers and attributes.

Abstract

Purpose

This chapter proposes a new mixture model which allows for heterogeneity in sensitivities and decision rules across decision makers and attributes.

Theory

A new mixture model is put forward in which the different latent classes make use of different decision rules, where the use of generalised random regret minimisation kernel allows for within class heterogeneity in the decision rules applied across attributes.

Findings

Our theoretical developments are supported by the findings of an empirical application using data from a typical stated choice survey.

Originality and value

Existing work has looked at heterogeneity in decision rules and sensitivities across respondents. Other work has focused on the possibility that different decision rules apply to different attributes. This chapter puts forward a model that combines these two directions of research and does so in a way that lets the optimal specification be driven by the data rather than being imposed by the analyst.

Details

Bounded Rational Choice Behaviour: Applications in Transport
Type: Book
ISBN: 978-1-78441-071-1

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Book part
Publication date: 31 January 2015

Soora Rasouli and Harry Timmermans

This chapter reviews models of decision-making and choice under conditions of certainty. It allows readers to position the contribution of the other chapters in this book…

Abstract

Purpose

This chapter reviews models of decision-making and choice under conditions of certainty. It allows readers to position the contribution of the other chapters in this book in the historical development of the topic area.

Theory

Bounded rationality is defined in terms of a strategy to simplify the decision-making process. Based on this definition, different models are reviewed. These models have assumed that individuals simplify the decision-making process by considering a subset of attributes, and/or a subset of choice alternatives and/or by disregarding small differences between attribute differences.

Findings

A body of empirical evidence has accumulated showing that under some circumstances the principle of bounded rationality better explains observed choices than the principle of utility maximization. Differences in predictive performance with utility-maximizing models are however small.

Originality and value

The chapter provides a detailed account of the different models, based on the principle of bounded rationality, that have been suggested over the years in travel behaviour analysis. The potential relevance of these models is articulated, model specifications are discussed and a selection of empirical evidence is presented. Aspects of an agenda of future research are identified.

Details

Bounded Rational Choice Behaviour: Applications in Transport
Type: Book
ISBN: 978-1-78441-071-1

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Content available
Article
Publication date: 27 August 2020

Dieter Koemle and Xiaohua Yu

This paper reviews the current literature on theoretical and methodological issues in discrete choice experiments, which have been widely used in non-market value…

Abstract

Purpose

This paper reviews the current literature on theoretical and methodological issues in discrete choice experiments, which have been widely used in non-market value analysis, such as elicitation of residents' attitudes toward recreation or biodiversity conservation of forests.

Design/methodology/approach

We review the literature, and attribute the possible biases in choice experiments to theoretical and empirical aspects. Particularly, we introduce regret minimization as an alternative to random utility theory and sheds light on incentive compatibility, status quo, attributes non-attendance, cognitive load, experimental design, survey methods, estimation strategies and other issues.

Findings

The practitioners should pay attention to many issues when carrying out choice experiments in order to avoid possible biases. Many alternatives in theoretical foundations, experimental designs, estimation strategies and even explanations should be taken into account in practice in order to obtain robust results.

Originality/value

The paper summarizes the recent developments in methodological and empirical issues of choice experiments and points out the pitfalls and future directions both theoretically and empirically.

Details

Forestry Economics Review, vol. 2 no. 1
Type: Research Article
ISSN: 2631-3030

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Article
Publication date: 2 July 2020

Wing-Keung Wong

This paper aims to give a brief review on behavioral economics and behavioral finance and discusses some of the previous research on agents' utility functions, applicable…

Abstract

Purpose

This paper aims to give a brief review on behavioral economics and behavioral finance and discusses some of the previous research on agents' utility functions, applicable risk measures, diversification strategies and portfolio optimization.

Design/methodology/approach

The authors also cover related disciplines such as trading rules, contagion and various econometric aspects.

Findings

While scholars could first develop theoretical models in behavioral economics and behavioral finance, they subsequently may develop corresponding statistical and econometric models, this finally includes simulation studies to examine whether the estimators or statistics have good power and size. This all helps us to better understand financial and economic decision-making from a descriptive standpoint.

Originality/value

The research paper is original.

Details

Studies in Economics and Finance, vol. 37 no. 4
Type: Research Article
ISSN: 1086-7376

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Book part
Publication date: 31 January 2015

Junyi Zhang

The chapter outlines the principles underlying relative utility models, discusses the results of empirical applications and critically assesses the usefulness of this…

Abstract

Purpose

The chapter outlines the principles underlying relative utility models, discusses the results of empirical applications and critically assesses the usefulness of this specification against commonly used random utility models and other context dependence models. It also discusses how relative utility can be viewed as a generalisation of context dependency.

Theory

In contrast to the conventional concept of random utility, relative utility assumes that decision-makers derive utility from their choices relative to some threshold(s) or reference points. Relative utility models thus systematically specify the utility against such thresholds or reference points.

Findings

Examples in the chapter show that relative utility model perform well in comparison to conventional utility-maximising models in some circumstances.

Originality and value

Examples of relative utility models are rare in transportation research. The chapter shows that several recent models can be viewed as special cases of relative utility models.

Details

Bounded Rational Choice Behaviour: Applications in Transport
Type: Book
ISBN: 978-1-78441-071-1

Keywords

Content available
Book part
Publication date: 31 January 2015

Abstract

Details

Bounded Rational Choice Behaviour: Applications in Transport
Type: Book
ISBN: 978-1-78441-071-1

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Article
Publication date: 17 June 2008

Jerzy Józefczyk

In many decision‐making problems under parameter uncertainty, the most popular stochastic approach is not used because of its serious drawbacks. The purpose of this paper…

Abstract

Purpose

In many decision‐making problems under parameter uncertainty, the most popular stochastic approach is not used because of its serious drawbacks. The purpose of this paper is to present another approach, which copes with the uncertainty of parameters. It uses a precise criterion evaluating a decision with respect to uncertain parameters. This precision by the maximum operator is performed on a term based on the criterion and called the relative regret. The approach is applied to the allocation problems in a complex of operations.

Design/methodology/approach

The resource allocation problems in a complex of operations of independent and dependent structures to minimize a total execution time of all operations are investigated. Then, the results are extended for the problem of a task allocation in the complex of independent operations. The case is considered when the parameters in the functional models of the operations are uncertain, and their values belong to the intervals of known bounds. The solution algorithms for the uncertain problems are based on known solution algorithms for the corresponding deterministic problems. The solution algorithms for the latter problems are outlined in the paper.

Findings

The main contribution of the paper consists in presenting the property that it is possible for the uncertain problems considered to replace the solution of the uncertain allocation problems by solving a number of corresponding deterministic problems.

Research limitations/implications

The useful and interesting property of the solution algorithm for the allocation problems, in general, cannot be applied to the other decision‐making problems under uncertainty. As an example of such a problem, a simple routing‐scheduling problem is presented for which, however, a number of possible parameter scenarios can be substantially limited.

Practical implications

The allocation problems addressed in the paper have a variety of applications in computer systems and in manufacturing systems. Moreover, a lack of crisp values for the parameters in models of individual operations is rather common.

Originality/value

The paper extends previous results for the allocation problems in a complex of operations.

Content available
Article
Publication date: 12 February 2019

Isabel Sánchez García and Rafael Curras-Perez

The purpose of this paper is to study the drivers of service provider switching intention other than satisfaction and, additionally, analyse the moderating role of the…

Abstract

Purpose

The purpose of this paper is to study the drivers of service provider switching intention other than satisfaction and, additionally, analyse the moderating role of the type of service (utilitarian vs hedonic). Specifically, the authors study the effects of alternative attractiveness, post-purchase regret, anticipated regret and past switching behaviour.

Design/methodology/approach

A representative survey with 800 consumers of mobile phone services (utilitarian) and holiday destinations (hedonic) was carried out.

Findings

Satisfaction is not a significant antecedent of switching intention in the hedonic service and its effect is marginal in the utilitarian service. In the utilitarian service, the main predictor of switching intention is post-purchase regret, whereas in the hedonic service, the main determinants of switching intention are past switching behaviour and anticipated regret.

Originality/value

The main contribution of this study is the analysis of the determinants of provider switching behaviour that may explain abandonment by satisfied customers, to see if their influence is greater or smaller than that of satisfaction itself, which has been the most analysed variable. Furthermore, there are expected to be differences between utilitarian and hedonic services, an aspect which is also studied in this work.

Details

European Journal of Management and Business Economics, vol. 29 no. 1
Type: Research Article
ISSN: 2444-8494

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Book part
Publication date: 28 October 2019

Angelo Corelli

Abstract

Details

Understanding Financial Risk Management, Second Edition
Type: Book
ISBN: 978-1-78973-794-3

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Article
Publication date: 24 December 2020

Sai Vijay Tata, Sanjeev Prashar and Chandan Parsad

The present research has used the expectancy–confirmation model along with the regret theory to examine the influence of six e-retailers' characteristics and confirmation…

Abstract

Purpose

The present research has used the expectancy–confirmation model along with the regret theory to examine the influence of six e-retailers' characteristics and confirmation on shoppers' satisfaction or regret. Further, the effect of these two cognitive constructs has been investigated on consumers' post-purchase behaviour like the intention to write reviews, repurchase intentions and brand-switching behaviour.

Design/methodology/approach

Extensive review of the literature was undertaken to identify the related factors. Data were collected using the survey instrument from 367 respondents. Structural equation modelling using Amos 22.0 was carried out for analysing the data.

Findings

The findings from the data collected from 367 respondents include the significant influence of price transparency, service quality and firms’ sincerity on shoppers' satisfaction.

Originality/value

Contrary to expectations, it is observed that product assortment, product quality and quality of personalisation did not have any such influence. Also, a firm's sincerity is the only factor that influenced regret. The noticeable outcome of the study pertains to the fact that online reviews are only provided by satisfied shoppers and not shoppers who regret. Rather, such regretting customers prefer switching to the alternative brand(s) and are less inclined to repurchase.

Details

Benchmarking: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1463-5771

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