Publication Type
Conference Proceeding Article
Version
publishedVersion
Publication Date
7-2023
Abstract
Online service platforms have transformed how customers and suppliers connect in real-time, using centralized dispatch and pricing systems. However, by acting as "central planners", platforms risk undermining the workers' flexibility endorsed by the gig economy. Hence, there has been significant scrutiny on the classification of gig workers as independent contractors and their freedom in decisions that directly influence their earnings, such as prices. To alleviate such concerns, several platforms in the ride-hailing industry have adopted or tested decentralized pricing schemes, where workers set prices flexibly. However, this approach presents a complex trade-off. On the one hand, platforms' pricing systems enable an efficient matching process by balancing demand and supply. Individual suppliers' pricing decisions may overlook market-wide effects on supply-demand equilibrium. On the other hand, suppliers possess private information about their preferences and costs that platforms cannot easily infer and use for price discrimination. Decentralized pricing can accommodate supplier-side heterogeneity, potentially increasing workers' participation in the market.
Discipline
Operations and Supply Chain Management
Research Areas
Operations Management
Publication
EC 2023: Proceedings of the 24th ACM Conference on Economics and Computation, London, July 9-12
First Page
115
Last Page
115
ISBN
9798400701047
Identifier
10.1145/3580507.3597788
Publisher
ACM
City or Country
New York
Citation
ALI, Aouad; SARITAC, Omer; and YAN, Chiwei.
Centralized versus decentralized pricing controls for dynamic matching platforms. (2023). EC 2023: Proceedings of the 24th ACM Conference on Economics and Computation, London, July 9-12. 115-115.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/7607
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1145/3580507.3597788
Comments
A full version of this paper can be found at: https://tinyurl.com/2azy2wna