Heterogeneity in commuter departure time decision: a prospect theoretic approach

We investigate the applicability of prospect theory in the context of morning commutes. We extend the analysis adopted in our previous study to account for both observed and unobserved heterogeneity across commuters. Two decision frames with multiple reference points and a maximum satisfaction point (preferred arrival time, PAT) are assumed to exist for commuters. One of the decision frames involves a quasigain region where commuters value gains as if they are losses. This decision frame is fully compatible with prospect theory, while the other yielded results which are incompatible with the theory in the case of losses