Laurent Denant-Boemont

Risk aversion: an experiment with self-employed workers and salaried workers

In this article we present the results of a lottery-choice experiment to address the following questions: Do risk vary across individuals? What is the impact of context on risk aversion? The originality of this research lies in introducing variability in socio-demographic characteristics by recruiting not only students but also ‘real people’ among salaried workers and self-employed workers. Our results indicate that risk attitude strongly varies across individuals. In particular, individuals who are self employed tend to be significantly less risk averse than others. In addition, we replicated Holt and Laury (2002, 2005) and Harrison et al. (2005)’s findings that individuals tend to be more risk averse with higher payoffs. Finally, our results concerning a potential experience effect indicate the existence of a significant order effect for both treatments.

An experimental study of the Online Information Paradox: Does en-route information improve road network performance?

This study investigates the empirical presence of a theoretical transportation paradox, defined as the “Online Information Paradox” (OIP). The paradox suggests that, for certain road networks, the provision of online information deteriorate travel conditions for all users of that network relative to the situation where no online information is provided to users. The analytical presence of the paradox was derived for a specific network structure by using two equilibrium models, the first being the Expected User Equilibrium (EUE) solution (no information scenario) and the other being the User Equilibrium with Recourse (UER) solution (with information scenario). An incentivised computerised route choice game was designed using the concepts of experimental economics and administered in a controlled laboratory environment to investigate the physical presence of the paradox. Aggregate statistics of path flows and Total System Travel Costs (TSTC) were used to compare the experimental results with the theoretical findings. A total of 12 groups of 12 participants completed the experiment and the OIP and the occurrence of the OIP being significant was observed in 11 of the 12 cases. Though information increased travel costs for users on average, it reduced the volatility of travel costs experienced in the no information scenario indicating that information can achieve a more reliable system. Further replications of similar experiments and more importantly field based identification of the phenomena will force transport professionals to be aware of the emergence of the paradox. In addition, studies such as this emphasise the need for the adoption of adaptive traffic assignment techniques to appropriately model the acquisition of information on a road network.