On ordinal utility, cardinal utility, and random utility

Though the Random Utility Model (RUM) was conceived  entirely in terms of ordinal utility, the apparatus throughwhich it is widely practised exhibits properties of  cardinal utility.  The adoption of cardinal utility as a  working operation of ordinal is perfectly valid, provided  interpretations drawn from that operation remain faithful  to ordinal utility.  The paper considers whether the latterrequirement holds true for several measurements commonly  derived from RUM.  In particular it is found that  measurements of consumer surplus change may depart from  ordinal utility, and exploit the cardinality inherent in  the practical apparatus.

Optimization of a bus and rail transit system with feeder bus services under different market regimes

This paper proposes analytical models for optimizing a bus and rail transit system with feeder bus services under different market regimes. The market regimes concerned include: monopoly (with profit maximization), social optimum (with social welfare maximization), and oligopoly. In the proposed models, transit operator aims to optimize the frequencies and fares of the bus, rail and feeder bus services, while accounting for the responses from transit passengers (in terms of travel mode choice as well as demand elasticity) to the level of transit services and fares. A solution algorithm is developed to solve the proposed models. Numerical results show that a single implementation of the feeder bus service scheme may not be most cost-effective. A joint implementation of the feeder bus service scheme and other schemes, such as transfer coordination between transit modes and integrated fare scheme, can significantly improve the performance of the multimodal transit system in terms of total social welfare