A game-theoretic model of car ownership and household time allocation

- A game-theoretic model of car ownership is developed.
- Household interaction is considered.
- Both time and money allocations are considered.
- An empirical application of the model is conducted.

The explosive growth of private cars in China and other developing countries has attracted a great deal of renewed research interest in car ownership. This paper investigates households' car ownership decision-making process from the perspective of household time allocation. Applying the game-theoretic approach to capturing household members' interactive decision-making mechanism, we propose a two-stage model that links household members' short-term time allocation decisions to long-term car ownership decisions. The first stage models the bargaining of household members (e.g., husband and wife) over the car ownership decision, taking into consideration of government policies for regulating car ownership; and the second stage is a generalized Nash equilibrium model for activity-travel pattern analysis incorporating individuals' interactions concerning activity participation. The existence and uniqueness of the generalized Nash equilibrium solution is examined, and a heuristic procedure that combines backwards induction and method of exhaustion is adopted to solve the two-stage game. The proposed model is applied to an empirical case study in Beijing, which demonstrates the applicability of the model in predicting car ownership and examining interactions between car ownership and household time allocation. The empirical model is applied to assess the impacts of plate-number-based vehicle usage rationing policies on car ownership and time allocation to travel and daily activities. Results show that the model can be applied to evaluate the car ownership impacts of car usage rationing policies.