A stochastic generalized Nash equilibrium model for platforms competition in the ride-hail market
Abstract
The presence of uncertainties in the ride-hailing market complicates the pricing strategies of on-demand platforms that compete each other to offer a mobility service while striving to maximize their profit. Looking at this problem as a stochastic generalized Nash equilibrium problem (SGNEP), we design a distributed, stochastic equilibrium seeking algorithm with Tikhonov regularization to find an optimal pricing strategy. Remarkably, the proposed iterative scheme does not require an increasing (possibly infinite) number of samples of the random variable to perform the stochastic approximation, thus making it appealing from a practical perspective. Moreover, we show that the algorithm returns a Nash equilibrium under mere monotonicity assumption and a careful choice of the step size sequence, obtained by exploiting the specific structure of the SGNEP at hand. We finally corroborate our results on a numerical instance of the on-demand ride-hailing market.
Keywords
Cite
@article{arxiv.2203.15412,
title = {A stochastic generalized Nash equilibrium model for platforms competition in the ride-hail market},
author = {Filippo Fabiani and Barbara Franci},
journal= {arXiv preprint arXiv:2203.15412},
year = {2022}
}