Theoretical issues in the development of a RUM of inter-agency choice, with an application to city logistics

Whilst politicians have shown considerable enthusiasm for urban goods transport - recognising the stimulus it offers to the development of cities (the so-called economies of urbanization) - there is growing acceptance that this must be offset against less desirable implications for the environment, congestion, the incidence of accidents and energy consumption. The motivation for this paper arises from the proposition that many of the latter implications are symptomatic of an economic failure: that is, a failure associated with disequilibrium among the various agents comprising the supply chain. More specifically, there is an evident lack of co-ordination between the relevant stakeholders (producers, shippers, carriers, retailers, transport operators), and this manifests in inefficiency which is amplified throughout the supply chain. Hence the principal contribution of this paper is to propose a model that represents the preferences of each agent within the supply chain, as well as the interaction between the preferences of these agents. This representation is developed within the paradigm of the Random Utility Model (RUM), thereby facilitating practical application to valuation, demand forecasting and economic appraisal. A review of methods is presented, applying game theoretic concepts to discrete choice models. Arising from our review is a methodological critique. The critique identifies an unwelcome - and potentially damning - property common to many of the models cited above. That is to say, the interest in merging game theoretic concepts with discrete choice models often engenders the so-called Mother Logit property. According to this property, which derives from an attempt to accommodate similarities between discrete alternatives, the utility of an alternative is the function not only of its own attributes, but also the attributes of other alternatives. An unfortunate implication is that Mother Logit is not consistent with RUM. A new theoretical framework for representing inter-agency choice within a discrete choice model, whilst ensuring consistency with microeconomic theory (and RUM) is proposed. For the covering abstract see ITRD E137145.

• Authors:
  • PAGLIONE, G
  • Batley, R
  • IBANEZ, J N
  • WHITEING, A
• Publication Date: 2007

Language

• English

Media Info

• Pagination: 19p
• Serial:
  • PROCEEDINGS OF THE EUROPEAN TRANSPORT CONFERENCE (ETC) 2007 HELD 17-19 OCTOBER 2007, LEIDEN, THE NETHERLANDS

Subject/Index Terms

• TRT Terms: Conferences; Economics; Freight transportation; Logistics; Mathematical models; Transportation; Urban areas
• Uncontrolled Terms: Selection
• ITRD Terms: 8525: Conference; 263: Economics of transport; 1112: Freight transport; 264: Logistics; 6473: Mathematical model; 9072: Selection; 313: Urban area
• Subject Areas: Economics; Transportation (General); I10: Economics and Administration;

Filing Info

• Accession Number: 01095387
• Record Type: Publication
• Source Agency: Transport Research Laboratory
• Files: ITRD
• Created Date: Apr 25 2008 9:14AM