Surge Pricing Solves the Wild Goose Chase
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2890666 [papers.ssrn.com]
2017-01-01 23:39
Why is dynamic pricing more prevalent in ride-hailing apps than movies and restaurants?
Interesting theory. Increased demand for rides actually results in reduced utilization, as a hailed ride must transit to the pickup location (the wild goose chase). Increase pricing, reduce demand, increase utilization.
source: MR