This study is an attempt to explain the inelastic behavior of automobile drivers in response to road pricing with respect to the endowment effect, mental accounting and sunk cost. The results drawn from experiments suggests that the effectiveness of road pricing in achieving a desired optimal level of traffic depends on setting charges which incorporate the inelastic nature of demand and the high value drivers place on the loss of travel time as a result on traffic congestion. However, this must be complemented by a comprehensive and efficient public transport network, high parking charges within the CBD and environmental awareness on the social costs of traffic congestion.


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    Title :

    Implications of Prospect Theory on Road Pricing Strategies


    Contributors:

    Conference:

    Sixth International Conference of Traffic and Transportation Studies Congress (ICTTS) ; 2008 ; Nanning, China



    Publication date :

    2008-07-17




    Type of media :

    Conference paper


    Type of material :

    Electronic Resource


    Language :

    English




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