Title: “Dynamic Pricing in a Labor Market: Surge Pricing and Flexible Work on the Uber Platform”
Abstract: In many markets, new technologies allow traditional jobs to be divided into discrete tasks that are widely distributed across workers and dynamically priced given prevailing supply and demand conditions. This “sharing” or “gig” economy represents a more flexible work system, and is most common in two-sided markets in which a firm acts as a platform to connect service providers and consumers. One prominent example of this is the ride-sharing company Uber, which connects riders and driver-partners, and dynamically prices trips using a system known as “surge” pricing. In this talk, I discuss the practical problems of designing such a dynamic pricing system, how that dynamic pricing coordinates workers who can now earn compensation on a flexible schedule, and more broadly how the “gig” economy is evolving and growing as a form of market organization.
Bio: Keith Chen is an Associate Professor of Economics with tenure at the UCLA Anderson School of Management. His research blurs traditional disciplinary boundaries in both subject and methodology, bringing unorthodox tools to bear on problems at the intersection of Economics, Psychology, and Biology.In early work examining the evolutionary origins of economic behavior, he has shown that when monkeys are taught to use money, they display many of the hallmark biases of human economic behavior, suggesting that some of our most fundamental biases are evolutionarily ancient. Professor Chen's most recent work focuses on how people's economic choices are influenced by the structure of their language. His work has shown that how a person's language encodes future events influences future-oriented behaviors as diverse as saving, smoking, and safe sex. Professor Chen also advises numerous companies on topics at the intersection of behavioral economics, business strategy, and dynamic pricing. Most recently he was the Head of Economic Research for Uber, where among other projects he designed Uber's current "Surge" pricing model.