Information Effect in Taxi Service Double Auction with Opportunity Cost: An Experimental Analysis
Inspired by the taxi refusal problem, we propose a double auction for taxi services with a variable supply-and-demand fare surcharge. In contrast to a conventional commodity double auction, our taxi service auction involves an opportunity cost that generally increases with time. Therefore, the bidding behaviour differs from that reported in the literature. We investigate experimentally the effects on bidding behaviour of the opportunity costs and private values of drivers and passengers, as well as of the types of given information. In addition, we compare the realized benefits between passengers and drivers. The results show that the degree of sensitivity to private value differs with opportunity cost and that transaction statistics vary with types of the information given to bidders. Moreover, we found that providing more information to bidders does not necessarily lead to better market performance and that giving suitable information to bidders could lead to a balanced benefit between passenger and driver.