The Effect of Reference Point on Stochastic Network Equilibrium

Following studies of human decision-making under risk and uncertainty, extensive evidence of loss aversion and asymmetric risk-taking behaviour around a reference point was found. This work presents an investigation of the effect of the reference point value on the stochastic network equilibrium. Prospect Theory, based on empirical experiments, proposes an alternative to the traditional risktaking modelling in travel behaviour, which might be too simplistic. The sensitivity of stochastic network equilibrium to the value of the reference point is presented here, and the potentiality of Prospect Theory is demonstrated.