Given that the cumulative prospect theory provides a well-supported descriptive paradigm for decision making under risk or uncertainty, previous studies applied the theory to model_travelers route choice behaviors in stochastic networks and developed prospect-based user equilibrium models. The models rely on exogenous inputs of reference points and thus_the resulting reference-dependence could be regarded as an ad hoc assumption. This paper proposes a conjecture on travelers determination of reference points and encapsulates it_into the prospect-based user equilibrium conditions. The conditions are formulated as an equivalent variational inequality and a heuristic solution algorithm is proposed to solve_it. Both the model and the solution algorithm are demonstrated in two numerical examples. As one application, this paper further develops an optimal pricing model in which_the proposed user equilibrium model is adopted to capture travelers response to pricing signals under risk. The pricing model is formulated as a mathematical program with complementarity_constraints, solved by a derivative-free algorithm. Another numerical example is presented to illustrate the pricing model and the solution algorithm. (A) Reprinted with permission from Elsevier.
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