A network ridesharing experiment with sequential choice of transportation mode

Vincent Mak, Darryl A. Seale, Eyran J. Gisches (), Amnon Rapoport, Meng Cheng, Myounghee Moon and Rui Yang
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Vincent Mak: University of Cambridge
Darryl A. Seale: University of Nevada, Las Vegas
Eyran J. Gisches: University of Arizona
Meng Cheng: University of California
Myounghee Moon: University of California
Rui Yang: University of California

Theory and Decision, 2018, vol. 85, issue 3, No 8, 407-433

Abstract: Abstract Within the last decade, there has been a dramatic bloom in ridesharing businesses along with the emergence of new enabling technologies. A central issue in ridesharing, which is also important in the general domain of cost-sharing in economics and computer science, is that the sharing of cost implies positive externalities and hence coordination problems for the network users. We investigate these problems experimentally in the present study. In particular, we focus on how sequential observability of transportation mode choices can be a powerful facilitator of coordination in ridesharing. Our study abstracts the essential issues of coordination in ridesharing into a directed network game with experimentally testable predictions. In line with the theoretical analysis, our experimental evidence shows that even a limited extent of sequential choice observability might lead to efficient coordination. However, convergence to efficiency is slower with more limited observability, resulting in a significant increase in travel cost.

Keywords: Ridesharing; Traffic networks; Sequential choice; Experiment (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11238-018-9663-y

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