Optimal Information Provision at Bottleneck Equilibrium with Risk-Averse Travelers

Abstract

This paper aims to study the effects of travel information provision on risk-averse travelers when travel time is uncertain. A stochastic bottleneck model is examined with risk-averse commuters, in which the free-flow travel time is assumed to be uncertain and follows a uniform distribution. A mean-variance approach is adopted to measure the travel cost under risk. It is proven that the individual travel cost at bottleneck equilibrium monotonically increases with the risk-aversion level. With a higher risk-aversion level, the morning peak hour starts earlier, but the duration of the peak hour remains constant regardless of the risk-aversion level. If improvement in information quality can reduce the travel time uncertainty, risk-averse commuters will benefit from the higher quality of information. Nevertheless, when the cost of information provision is also considered, the optimal information provision strategy is derived to minimize the total system cost. The numerical examples demonstrate the information efficiency and provision strategy. The findings reveal the congestion patterns of a stochastic bottleneck with risk-averse travelers and will guide us to provide appropriate travel information.