Modeling dominated choice alternatives using the constrained multinomial logit (2008)

Random utility models are widely used to analyze choice behaviour and predict choices among discrete alternatives in a given set. These models are based on the assumption that an individual?s preference for the available alternatives can be described with a utility function and that the individual selects the alternative with the highest utility (Ben-Akiva and Lerman, 1985; Cascetta, 2001). The traditional formulation of logit models applied to transport demand assumes compensatory (indirect) utilities based on the trade-off between attributes. Some authors have criticized this approach because it fails to recognize attribute thresholds in consumers? behavior, as for example the process of elimination-by-aspects (EBA) (Tversky, 1972), or a more generic feasible choices domain, including for example income and time constraints, where such compensatory strategy is contained. A different strategy has been proposed by Cascetta and Papola (2001) and Martinez et al. (2005), which makes those choice alternatives out of the feasible domain, available but undesirable. This approach has the advantage that the model is applied to the entire set of choices, thus gaining on efficiency by avoiding the explicit identification of choice sets for every individual, and secondly, obtaining a model with better properties for the calculation of equilibrium or optimum conditions (Martinez et al., 2005). Based on this approach, the Constrained Multinomial Logit (CMNL) model was specified, which combines the multinomial logit model with a binomial logit factor that represents soft cut-offs. The objective of this paper is to apply the CMNL to reproduce a principle of rationality: transferability of preferences. Under this principle some feasible alternatives may not be considered because they are dominated by another alternative. Conceptually, an alternative d is dominated by another alternative d* if d is ?worse? than d*, with respect to one or more characteristics, without being better with respect to any characteristic. We consider the general approach proposed by Cascetta and Papola (2005) and Cascetta et al. (2007) that extends and applies these concepts of dominance to the random utility theory. They defined a set of criteria to identify dominated alternatives for the case of the trip destination choice in a closed spatial context. This leads the authors to propose two types of dominance of alternatives: i) global dominance, when another alternative is globally preferred, considering their higher attractiveness and travel costs equal or lower; ii) spatial dominance, where in addition of the previous criterion the dominating alternative is along the path from the individual?s trip origin to the dominated alternative. The proposed approach is applied using the revealed preference survey conducted in 2005 in the canton of Zurich in Switzerland (Cascetta et al., 2007), covering the mobility and moving biography of the respondents. The estimation results (Bierlaire, 2007) of the proposed model will be compared with the ones reported in Cascetta et al. (2007) to derive some conclusions about both the specification of dominance variables in the CMNL model and the calibration procedure of this model. Conclusions are also obtained on the data required for the application of CMNL on other similar contexts.