Fosgerau, Mogens and Karlström, Anders (2010): The value of reliability. Published in: Transportation Research Part B , Vol. 44, (2010): pp. 38-49.
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We derive the value of reliability in the scheduling of an activity of random duration, such as travel under congested conditions. Using a simple formulation of scheduling utility, we show that the maximal expected utility is linear in the mean and standard deviation of trip duration, regardless of the form of the standardised distribution of trip durations. This insight provides a unification of the scheduling model and models that include the standard deviation of trip duration directly as an argument in the cost or utility function. The results generalise approximately to the case where the mean and standard deviation of trip duration depend on the starting time. An empirical illustration is provided.
|Item Type:||MPRA Paper|
|Original Title:||The value of reliability|
|Keywords:||Welfare; Random duration; Time; Scheduling; Reliability; Variability|
|Subjects:||D - Microeconomics > D0 - General
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty
|Depositing User:||Mogens Fosgerau|
|Date Deposited:||04. Nov 2012 15:05|
|Last Modified:||12. Feb 2013 09:40|
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The value of reliability. (deposited 14. Nov 2007 06:00)
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