The Dual Effects of Team Contest Design on On-Demand Service Work Schedules

Tingting Dong (), Xiaotong Sun (), Qi Luo (), Jian Wang () and Yafeng Yin ()
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Tingting Dong: Department of Civil and Environmental Engineering, The Hong Kong University of Science and Technology, Hong Kong 999077, China
Xiaotong Sun: Thrust of Intelligent Transportation, The Hong Kong University of Science and Technology (Guangzhou), Guangzhou, Guangdong 511400, China
Qi Luo: Department of Industrial Engineering, Clemson University, Clemson, South Carolina 29634
Jian Wang: Department of Transportation Engineering, Harbin Institute of Technology, Harbin, Heilongjiang 150001, China
Yafeng Yin: Department of Civil and Environmental Engineering, University of Michigan, Ann Arbor, Michigan 48107

Service Science, 2024, vol. 16, issue 1, 22-41

Abstract: Emerging on-demand service platforms (OSPs) have recently embraced teamwork as a strategy for stimulating workers’ productivity and mediating temporal supply and demand imbalances. This research investigates the team contest scheme design problem considering work schedules. Introducing teams on OSPs creates a hierarchical single-leader multi-follower game. The leader (platform) establishes rewards and intrateam revenue-sharing rules for distributing workers’ payoffs. Each follower (team) competes with others by coordinating the schedules of its team members to maximize the total expected utility. The concurrence of interteam competition and intrateam coordination causes dual effects, which are captured by an equilibrium analysis of the followers’ game. To align the platform’s interest with workers’ heterogeneous working-time preferences, we propose a profit-maximizing contest scheme consisting of a winner’s reward and time-varying payments. A novel algorithm that combines Bayesian optimization, duality, and a penalty method solves the optimal scheme in the nonconvex equilibrium-constrained problem. Our results indicate that teamwork is a useful strategy with limitations. Under the proposed scheme, team contest always benefits workers. Intrateam coordination helps teams strategically mitigate the negative externalities caused by overcompetition among workers. For the platform, the optimal scheme can direct teams’ schedules toward more profitable market equilibria when workers have inaccurate perceptions of the market.

Keywords: on-demand service platforms; team contest; contest scheme design; market equilibrium (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:inm:orserv:v:16:y:2024:i:1:p:22-41

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