Application of experimental economics in transport and logistics

There is scope for applying experimental economics in transport and logistics analysis. Experimental economics is a set of techniques for gathering (and analysing) data by inducing people (through specific rewards) to act as economic agents and observing the choices they then make in experimental situations. These experiments often involve interactions between the respondents, possibly in a market setting, and this can be applied in transport to study for instance shipper – carrier interaction. Various subfields of experimental economics that might be relevant for transport and logistics research are described. We also review past applications of experimental economics in transport and logistics and work out some ideas for future applications

The logsum as an evaluation measure - review of the literature and new results

Transport infrastructure projects in The Netherlands are appraised ex ante by using cost-benefit analysis (CBA) procedures following the so-called ‘OEI-guidelines’. The project benefits for travellers are incorporated in the form of changes in demand (e.g. from the Dutch national model system, LMS, or the regional models, NRM) and changes in the generalised travel costs (using values of time from Stated Preference studies to monetise travel time savings), and applying the rule of half. While a number of short-term improvements to the current procedures have been improved, it is also interesting to consider a more radical approach using explicit measures of consumer surplus, obtained by integrating the demand models directly. These measures are called logsums, from their functional form. The advantages that the logsums would give to the appraisal procedure would be that logsums can incorporate a degree of heterogeneity in the population, while also being theoretically more correct and in many cases easier to calculate. In this context, the Transport Research Centre (AVV) of the Dutch Ministry of Transport, Public Works and Water Management has commissioned RAND Europe to undertake a study comparing the conventional approach to the use of the logsum change as a measure of the change in consumer surplus that would result from a transport infrastructure project. The paper is based on the work conducted in the study. The paper opens with a review of the literature on the use of logsums as a measure of consumer surplus change in project appraisal and evaluation. It then goes on to describe a case study with the Dutch National Model System (LMS) for transport in which three methods are compared for a specific project (a high speed magnetic hover train that would connect the four main cities in the Randstad: Amsterdam, The Hague, Rotterdam and Utrecht): a.the ‘classical’ CBA approach as described above, b.the improved ‘classical’ CBA approach (introducing a number of short-term improvements) and c.the logsum approach (as a long term improvement). The direct effects of a particular policy on the travellers can be measured as the change in consumer surplus that results from that policy (there can also be indirect and external effects that may not be covered in the consumer surplus change). The consumer surplus associated with a set of alternatives is, under the logit assumptions, relatively easy to calculate. By definition, a person’s consumer surplus is the utility, in money terms, that a person receives in the choice situation. If the unobserved component of utility is independently and identically distributed extreme value and utility is linear in income, then the expected utility becomes the log of the denominator of a logit choice probability, divided by the marginal utility of income, plus arbitrary constants. This if often called the ‘logsum’. Total consumer surplus in the population can be calculated as a weighted sum of logsums over a sample of decision-makers, with the weights reflecting the number of people in the population who face the same representative utilities as the sampled person. The change in consumer surplus is calculated as the difference between the logsum under the conditions before the change and after the change (e.g. introduction of a policy). The arbitrary constants drop out. However, to calculate this change in consumer surplus, the researcher must know the marginal utility of income. Usually a price or cost variable enters the representative utility and, in case that happens in a consistent linear additive fashion, the negative of its coefficient is the marginal utility of income by definition. If the marginal utility of income is not constant with respect to income, as is the case in the LMS and NRM, a far more complex formula is needed, or an indirect approach has to be taken. This paper will review the theoretical literature on the use of the logsum as an evaluation measure, including both the original papers on this from the seventies and the work on the income effect in the nineties. Also recent application studies that used the logsum for evaluation purposes will be reviewed. Finally outcomes of runs with the LMS will be reported for the three different approaches (including the logsum approach) mentioned above for evaluating direct effect of transport policies and projects. Different methods for monetising the logsum change will be compared.

Scanning tunnelling miscroscopy/spectroscopy and X-ray absorption spectroscopy studies of Co adatoms and anoislands on highly oriented pyrolytic graphite

In this paper, the scanning tunneling microscopy, scanning tunneling spectroscopy and X-ray absorption spectroscopy of cobalt adatoms and nanoislands were studied on a highly oriented pyrolytic graphite. Local electronic structure were observed by STS.\ud \u

The Driving Factors of Passenger Transport

Over the past few decades passenger transport has grown rapidly resulting in a multitude of problems including severe traffic congestion and pollution. It is expected that passenger transport will continue to grow rapidly in the future, which will worsen the situation even further. The traditional approach to deal with the problems is to expand the infrastructure. However, transport policy is a broad and versatile field. Many different types of policy measures can be observed in literature and practice. Sound transport policy-making requires knowledge on the drivers of transport demand This article is aimed at (re)structuring the many different insights in a single conceptual model, which reviews the key drivers, and how each affects the various choices that travellers make (activity type, destination, mode, time-of-day and route) and the resulting impact on overall passenger transport demand. The model was derived on the basis of a review of literature, which was supplemented by a review of thirteen exemplary urban area cases. In addition, a quantitative data analysis was carried out to assess the transport demand elasticities for various drivers. Current study has been carried out in response to the search for effective transport policy, which is discussed in the concluding section. The outcomes are of particular relevance of policy analysts and policy makers developing passenger transport policy, but are also useful for scholars and students in the field of transport

Cross-border Car Traffic in Dutch Mobility Models

Cross-border travel generates a substantial amount of mobility near the borders, but is not a large percentage of total Dutch mobility. However in the border regions of the country, these flows are important. For the Dutch national transport model LMS, O-D matrices are required that include cross-border car travel. This is a challenging task, due to scarcity of data. First, a production model (by travel purpose) is used to calculate the total production of car journeys. Next, these journeys are distributed over domestic and foreign destinations using a simplified destination choice model. From the resulting matrix, domestic journeys are removed and only the border crossing journeys are kept. Domestic journeys are then replaced by the results of the existing much more detailed mode-and destination choice models. The new models are estimated on the Dutch national mobility survey (MON) and are of reasonable quality. The predicted numbers of border crossing journeys to Belgium and Germany are lower than the numbers from traffic counts, and therefore an additional calibration to count data totals is carried out. The results indicate that for commuting the resistance to cross the border is equivalent to 35 (Belgium) or 46 (Germany) minutes extra travel time. Also for all other travel purposes in the model, it is found that the border resistance for journeys to Belgium is smaller than that for journeys to Germany, which can be explained by the additional factor of language difference. The smallest border resistance for both countries is found for shopping journeys

Shareholders’ Voting at General Meetings: Evidence from the Netherlands

We study annual general meetings of shareholders in the Netherlands. The Dutch corporate governance system is characterized by relatively concentrated shareholdings and large stakes owned by pension funds, banks and insurance companies. The legal protection of shareholders is poor due to takeover defenses, such as certificates, which deprive shareholders from their voting rights. An analysis of the minutes of 245 general meetings in the period 1998-2002 reveals that about 30% of the shareholders is present at the meeting. This is low in comparison with shareholder turn-out in Anglo-Saxon countries. Management sponsors all proposals at the meeting and only 9 out of 1,583 proposals are rejected or withdrawn. Multivariate analyses of the incidence and extent of voting against a proposal show that firm size and the type of proposal are important determinants. Overall, our findings suggest that shareholders in the Netherlands have hardly any influence on management

The Role of Self-Regulation in Corporate Governance

This paper assesses the effectiveness of self-regulation to promote investor interests. The Netherlands provides an excellent opportunity to gather such evidence for two reasons. First, characteristics of the Dutch corporate governance structure have made it the recent focus of attention by the European Union, the International Monetary Fund and countries (e.g., Korea) when deliberating issues of corporate governance. Second, during the period 1996-1998, a private sector initiative was undertaken to promote change in the balance of power between management and investors. Not surprisingly, the United States Securities and Exchange Commission has closely followed the Dutch "experiment" in self-regulation. We begin by identifying corporate governance characteristics that are linked to firm value. We then compare corporate governance characteristics and the relation between firm value and these characteristics before and after the private sector initiative. We find that the recommendations of the private sector initiative had no substantive effect on corporate governance characteristics or their relationship with firm value. Using event study techniques we document the market's skepticism about the successful evolution of corporate governance practices in the Netherlands through self-regulation. The one exception to this general conclusion is the market for new listings. Overall, our results confirm the importance of shareholder voting rights, and who controls these rights, when considering the design of a successful self-regulation process

Royal Ahold: A Failure Of Corporate Governance

Royal Ahold (Koninklijke Ahold NV) was one of the major success stories in the 1990s and is one of the major failures in corporate governance, suffering a complete meltdown in 2003. This clinical study analyzes Ahold’s growth strategy through acquisitions and isolates the cause of the failed strategy, i.e. the absence of internal as well as external oversight of management’s strategy. This study details the consequences of the strategy: bad acquisitions, an accounting scandal and the loss of investor confidence. It illustrates how initially a family and later professional management exploited the intent of the law and existing regulatory structures to maintain absolute control of the company. It analyzes in detail the applicable governance mechanisms of Ahold that were designed to hold the self-interest of the parties in check. It asks the reader to consider whether these governance mechanisms, properly implemented, might have helped prevent Ahold or a situation similar to Ahold