Timmermans’ Misleading Critique of Prospect Theory Actually Supports its Relevance for Travel Choice Modelling

For a special issue of this journal Timmermans (2010) was asked to make critical comments on the suitability of Prospect Theory for travel behaviour research. His article offers a comprehensive overview of all kinds of criticism that one might encounter in the social sciences. When browsing through it during the preparation of an article about the transferability of Prospect Theories’ assumptions I came across a citation of an alleged inferior explanatory performance of Prospect Theory with respect to people’s choices in the TV game ‘Deal or no Deal’. I curiously downloaded the cited working paper and found that the citation was fabricated. Successively I thoroughly reviewed the argumentations in the article and in several references that support them. This revealed more untruthful citations, inaccuracies in the references, fallacies and selective use of empirical evidence. Most remaining critical comments appeared personal opinions without solid theoretical or empirical support. In this paper I present an in-depth discussion of the foundations of the comments in T and a critical examination of the references advanced to support them. It leads me to the conclusion that Timmermans’ criticism is unjust and that the references that underlie it actually support the suitability of Prospect Theory for travel choice modelling. This article might also offer a guideline for a careful interpretation of conclusions as a contribution to an improved peer-review process aimed to block articles contaminated with bad scientific practice

Prospect Theory and Choice Behaviour Strategies: Review and Synthesis of Concepts from Social and Transport sciences

Utility Theory is commonly considered as the most useful descriptive theory of human choice behaviour. Alternative concepts are only incidentally considered. This paper reviews alternative assumptions and empirical findings about human choice behaviour. To facilitate comparison and synthesis the review starts with the proposal of a generic framework of choice behaviour. The micro-economic assumptions of Utility Theory and Prospect Theory are then mapped onto this framework. These are compared with each other and other assumptions against the background of theoretical and empirical findings from behavioural economics, several other social disciplines and transport sciences. An extension of Prospect Theory with assumptions about the valuation of attributes and the employment of different decision rules yields a functional concept of choice behaviour that is able to describe most of the reviewed empirical findings to a larger extent than Utility Theory

Sign-dependent Value of Time in Stated Preference: Judgment Bias or Exposure of Genuine Preference?

Stated choice surveys may be the most common approach to obtain monetary values of travel time. The large surveys of 1988 and 1997 in the Netherlands and of 1994 in the United Kingdom produced some puzzling outcomes, such as differences in monetary valuation between travel time gains and losses. This has given rise to controversies about the behaviour that might have caused this ‘sign effect’, which are not decisively settled. This paper shows that Prospect Theory and the heuristic judgment concept as developed in behavioural sciences can shed more light on these controversies2. It starts with an introduction of some basic principles of these lines of work before re-examining the Dutch and UK surveys from these points of view. It is concluded that the sign effect is not caused by biases that stem from heuristic judgment but follows from lossaversive valuation of time and money attributes as assumed in Prospect Theory