The Value of Travel Information: A Search-Theoretic Approach

This article presents a formulation of information acquisition that uses search theory to evaluate the value of information. The value of information is the added utility from being able to choose from the available travel alternatives after having received the information. There are three main advantages to the formulation: first, it results in a parsimonious model of information acquisition and travel choice. Second, it enables the use of observed information acquisition behavior for the estimation of travel related parameters (e.g., value of time). Third, its parameters are easily interpretable. The formulation is tested using data from a multimodal travel simulator with information provision. Estimation results provide face validity to the formulation. Results indicate that travelers on non-business trips attach particular importance to mean travel times, whereas during business trips travel time variability also plays an important role. Also, it is found that travelers prefer information that adds previously unknown alternatives to their choice set over information that provides estimates for uncertain attributes of known alternatives. A substantial heterogeneity exists with respect to travelers' valuation of the costs and benefits of travel information.