A network ridesharing experiment with sequential choice of transportation mode

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.

Coordination Behavior in Mode Choice: Laboratory Study of Equilibrium Transformation and Selection

“…We modeled the mode choice between public transport (with positive externalities) and private car (with negative externalities) as a coordination game. Four factors influencing coordination behavior and equilibrium selection and transformation, including descriptive information, historical experience, equilibrium transformation barrier, and Our analysis enriches the findings of the previous studies about coordination behaviors in mode choice (Liu et al 2015, Mak et al 2018a. First, providing descriptive information could change subjects' initial choices and facilitate coordination behavior.…”

“…2015, Mak et al. 2018a,b). First, providing descriptive information could change subjects' initial choices and facilitate coordination behavior.…”

“…8 In Liu et al (2015), subjects made mode choices simultaneously. Mak et al (2018a) extended the setting from simultaneous to sequential mode choices with observability. They found that even a limited extent of sequential observability could lead to efficient coordination.…”