Related Experiment Video
Updated: Dec 7, 2025
07:00
Measuring the Switch Cost of Smartphone Use While Walking
Published on: April 30, 2020
2.1K
Anomalous supply shortages from dynamic pricing in on-demand mobility
Malte Schröder1,2, David-Maximilian Storch3, Philip Marszal4,3
1Center for Advancing Electronics Dresden (cfaed), Technical University of Dresden, 01062, Dresden, Germany. malte.schroeder@tu-dresden.de.
Nature Communications
|September 25, 2020
Summary
Dynamic pricing can paradoxically cause supply shortages in ride-hailing services. This study reveals conditions where pricing strategies trigger driver behavior leading to imbalances, not equilibrium.
Area of Science:
- Complex Systems Science
- Game Theory
- Transportation Economics
Background:
- Dynamic pricing is widely used to balance demand and supply.
- Complex systems can exhibit unintended collective behaviors that disrupt intended functions.
Purpose of the Study:
- To investigate how dynamic pricing in ride-hailing services can lead to demand-supply imbalances.
- To identify the conditions under which dynamic pricing induces supply shortages.
Main Methods:
- Game theory modeling to understand driver incentives.
- Time series analysis of dynamic pricing data from global ride-hailing services.
- Derivation of a phase diagram to illustrate conditions for supply anomalies.
Main Results:
- Dynamic pricing can incentivize collective driver actions that create artificial supply shortages.
- Specific patterns in price dynamics correlate with these anomalous supply shortages.
- Analysis of data from 137 global locations reveals consistent patterns.
Conclusions:
- Dynamic pricing may not always achieve demand-supply balance and can instead cause shortages.
- Understanding the conditions for anomalous supply shortages is crucial for regulating dynamic pricing in mobility systems.
Related Concept Videos
02:20Dynamic Equilibrium
60.3K
A reversible chemical reaction represents a chemical process that proceeds in both forward (left to right) and reverse (right to left) directions. When the rates of the forward and reverse reactions are equal, the concentrations of the reactant and product species remain constant over time and the system is at equilibrium. A special double arrow is used to emphasize the reversible nature of the reaction. The relative concentrations of reactants and products in equilibrium systems vary greatly;...
60.3K
02:12Short-distance Transport of Resources
17.2K
Short-distance transport refers to transport that occurs over a distance of just 2-3 cells, crossing the plasma membrane in the process. Small uncharged molecules, such as oxygen, carbon dioxide, and water, can diffuse across the plasma membrane on their own. In contrast, ions and larger molecules require the assistance of transport proteins due to their charge or size. Transport across membranes also occurs within individual cells, playing a variety of essential roles for the plant as a whole.
17.2K
01:41Social Traps
26.1K
Social traps are negative situations where people get caught in a direction or relationship that later proves to be unpleasant, with no easy way to back out of or avoid. The concept was orignally introduced by John Platt who applied psychology to Garrett Hardin's "Tragedy of the Commons", where in New England herd owners could let their cattle graze in the common ground. This situation seems like a good idea, but an individual could have an advantage. If they owned...
26.1K
01:22Nonlinear Pharmacokinetics: Causes of Nonlinearity
555
Nonlinearity in drug pharmacokinetics is caused by various factors influencing how a drug is absorbed, distributed, metabolized, and excreted. Understanding these nonlinear processes is crucial for predicting drug behavior in the body and optimizing drug dosing regimens.
Nonlinear drug absorption can occur when the process is rate-limited by solubility, carrier-mediated transport systems, or saturation of the presystemic gut wall or hepatic metabolism. For instance, high doses of riboflavin...
Nonlinear drug absorption can occur when the process is rate-limited by solubility, carrier-mediated transport systems, or saturation of the presystemic gut wall or hepatic metabolism. For instance, high doses of riboflavin...
555
01:29Issues And Trends In Healthcare Delivery System
6.0K
The issues and trends in healthcare delivery are constantly changing. The COVID-19 pandemic is one recent issue that wreaked havoc on healthcare systems, causing a shortage of healthcare workers, high demand for medicines and supplies, and increased medical expenditure due to a lack of insurance. Other issues include rising healthcare costs and care fragmentation.
Cost Containment
Payment for healthcare services has historically promoted adoption of costly and often unnecessary or inefficient...
Cost Containment
Payment for healthcare services has historically promoted adoption of costly and often unnecessary or inefficient...
6.0K
01:08The Availability Heuristic
6.8K
A heuristic is a general problem-solving framework (Tversky & Kahneman, 1974). You can think of these as mental shortcuts that are used to solve problems. Different types of heuristics are used in different types of situations, and the impulse to use a heuristic occurs when one of five conditions is met (Pratkanis, 1989):
6.8K