Dynamics of Ride Sharing Competition
Lee, Cassey | July 2017
Abstract
This paper studies the dynamics of ride-sharing competition. Ride-sharing is modelled as a spatial two-sided market with heterogeneous passengers and drivers, both located on a Salop (1979) circle. The model is simulated to study four aspects of ride-sharing competition:(i) price distribution and dynamics, (ii) strategic pricing, (iii) fixed pricing vs. surge pricing, and (iv) information-sharing. Dynamic platform competition in a spatial setting can generate distinct and persistent bands of fluctuating prices. Space and stochastic luck can mitigate winner-take-all effects in price competition. Platforms adopting fixed pricing can compete with platform with surge pricing provided the former are not set too high. However, space and stochastic luck can also render the outcomes of such competition uncertain. Information sharing eliminates price fluctuations by pooling information on demand. The complexity of ride-sharing implies that the impact of policy interventions cannot be known in advance in some cases.
Citation
Lee, Cassey. 2017. Dynamics of Ride Sharing Competition. © ISEAS Yusof Ishak Institute. http://hdl.handle.net/11540/7689.Keywords
Price stabilization
Food prices
Price policy
Crisis
Unemployment
Economic cooperation
Gross domestic product
Employment
Economic forecast
Economic indicators
Growth models
Gross domestic product
Macroeconomics
Economic forecast
Social condition
Economic dependence
Economic assistance
Economic Crisis
Economic Efficiency
Economic Policies
Regional Economic Development
Job Evaluation
Evaluation
Macroeconomic
Macroeconomic Analysis
Performance Evaluation
Impact Evaluation
Economic Welfare
Economic Incentives
Open price system
Price fixing
Price regulation
Consumer price indexes
Financial crisis
Labor economics
Regional economics
Turnover
Economic survey
Job analysis
Labor turnover
Exports
Economic development projects
Economic policy
Economic forecasting
Welfare economics
Welfare state
Poor
Food relief
Poverty
Domestic economic assistance
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