Integrating prospect theory and Stackleberg games to model strategic dyad behavior of information providers and travelers: theory and numercial simulations

Existing policy models of optimal guidance strategies are typically concerned with single-objective optimization based on reliable forecasts in terms of the consistency between predicted and observed aggregate activity-travel patterns. The interaction and interdependencies between policy objective and individuals have not received much attention. This paper considers how one specific activity schedule choice—namely, the start time of an activity chosen by individual travelers under guidance information—aggregates to form an equilibrium distribution, which in turn influences guidance generation and determines the best possible achievement of the policy objective. These choices are formalized as the outcomes of a Stackelberg game in which a traveler's behavior model is integrated with prospect theory. The properties of the model are examined by using numerical computer simulations. The results of the simulations support the face validity of the formulated model