COST MINIMIZING BEHAVIOR IN RANDOM DISCRETE CHOICE MODELING. IN: URBAN AND REGIONAL TRANSPORTATION MODELING. ESSAYS IN HONOR OF DAVID BOYCE

Abstract

This chapter on cost minimizing behavior in random discrete choice modeling is one in a book of essays published in honor of David Boyce for his contributions to the fields of transportation modeling and regional science. In this chapter, the authors describe and define the new notion of cost minimization behavior applied to the most simple case of a discrete choice situation. The authors then show how the multi-attribute multinomial logit model and the gravity model for trip distribution can be derived from this new definition. Instead of considering the rational behavior for an individual decision maker, by making an assumption regarding the probability distribution for the random cost component, the authors define rational behavior for a group of decision makers. The authors also discuss cost minimizing behavior in the general case of discrete choice modeling.