Differentiated Service Pricing Strategies for Ride-Hailing Considering Rational Inattentive Passengers

Differentiated Service Pricing Strategies for Ride-Hailing Considering Rational Inattentive Passengers | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Differentiated Service Pricing Strategies for Ride-Hailing Considering Rational Inattentive Passengers Chuan-Lin Zhao, Yangqi Sun, Shaosong He This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-4699643/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract Considering the ambiguity of passengers’ perception of the real service level of ride-hailing, the heterogeneity of driver and passenger preferences for differentiated service modes, the frictions of driver and passenger matching, and the inter-group network externality caused by the scale of driver and passenger, this paper establishes a bi-level optimization model for the pricing strategies of differentiated services on ride-hailing platforms based on the theory of rational inattention. It explores the pricing mechanism of ride-hailing platforms under two optimization objectives (profit maximization and social welfare maximization) and three service strategies (providing both high and low differentiated services, providing a single low service, and providing a single high service). The upper level aims to maximize the profits of ride-hailing platform or social welfare, with service price and commission rate as decision variables. The lower level constructs a driver-passenger equilibrium choice model based on the theory of rational inattention. The model is solved using a combination of particle swarm optimization (PSO) algorithm and method of successive averages (MSA). The upper level model uses PSO algorithm to obtain differentiated service prices and commission rates, which are transmitted to the lower level. The lower level model uses the MSA to solve, and the obtained matching rate and maximum matching time of the driver are transmitted to the upper level. Numerical examples have verified the effectiveness of the model and algorithm. The results show that when passenger prior beliefs follow a uniform distribution, under three strategies, the platform profit shows a trend of first increasing and then decreasing with the increase of unit information cost. To ensure maximum profit, the platform should disclose the service information of ride-hailing as much as possible, but also maintain the unknownness of ride-hailing services appropriately. When the goal is to maximize social welfare, when the unit information cost is low, compared to providing a single service strategy, differentiated service strategy can better meet the differentiated choices of drivers and passengers, thereby ensuring higher social welfare. As the unit information cost increases, three strategies need to attract rational inattentive passengers to choose ride-hailing services by reducing service prices, thereby improving social welfare. The results can provide references for ride-hailing platforms in formulating pricing strategies for differentiated services. Ride-hailing services Differentiated pricing Rational inattention Unit information cost Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-4699643","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":333604641,"identity":"6609e710-75f9-46f3-acec-6016ab0b81b6","order_by":0,"name":"Chuan-Lin Zhao","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA+klEQVRIiWNgGAWjYDACCSBmbAAS7EDyYwNUlIcoLcyMDYwzSdQCRLzEaJGf3fzwwc8dh+XNmZnbHtsCGfzsBxgfvG1jkDfHoYVxzjFjw94zhw13NjO2G+cCGTN7EpgN57YxGO5swK6FWSLBTJqx7TDjhsOMbdK5bYcTDA4ksEnztjEAGdi1sEmkfwNpsQdrsQRqsT//gP03Pi08EjlgWxLBWhhBtkgksDHj0yIhkVNs2NuWngzSItl7Jt1wxo2HzZJzzkkYbsChRX5G+sYHP9usbTccb38m8XOHtTx/f/LBD2/KbORx2YINgKNJgnj1o2AUjIJRMAowAADKp1pacWWooAAAAABJRU5ErkJggg==","orcid":"","institution":"Beijing University of Civil Engineering and Architecture","correspondingAuthor":true,"prefix":"","firstName":"Chuan-Lin","middleName":"","lastName":"Zhao","suffix":""},{"id":333604642,"identity":"666ba70a-3a2f-41f2-a5fd-444499f27d03","order_by":1,"name":"Yangqi Sun","email":"","orcid":"","institution":"Beijing University of Civil Engineering and Architecture","correspondingAuthor":false,"prefix":"","firstName":"Yangqi","middleName":"","lastName":"Sun","suffix":""},{"id":333604643,"identity":"deaa8bf3-5ac0-493b-9087-ded92e163cfd","order_by":2,"name":"Shaosong He","email":"","orcid":"","institution":"Beihang University","correspondingAuthor":false,"prefix":"","firstName":"Shaosong","middleName":"","lastName":"He","suffix":""}],"badges":[],"createdAt":"2024-07-07 09:45:16","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-4699643/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-4699643/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":61501425,"identity":"99176038-4533-496b-a87d-b25735e46377","added_by":"auto","created_at":"2024-07-31 12:52:39","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":725257,"visible":true,"origin":"","legend":"","description":"","filename":"DifferentiatedServicePricingStrategiesforRideHailingConsideringRationalInattentivePassengers20240705.pdf","url":"https://assets-eu.researchsquare.com/files/rs-4699643/v1_covered_2d377c41-d0fe-4d9e-bac6-5166cdbc112d.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Differentiated Service Pricing Strategies for Ride-Hailing Considering Rational Inattentive Passengers","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Ride-hailing services, Differentiated pricing, Rational inattention, Unit information cost","lastPublishedDoi":"10.21203/rs.3.rs-4699643/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-4699643/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eConsidering the ambiguity of passengers\u0026rsquo; perception of the real service level of ride-hailing, the heterogeneity of driver and passenger preferences for differentiated service modes, the frictions of driver and passenger matching, and the inter-group network externality caused by the scale of driver and passenger, this paper establishes a bi-level optimization model for the pricing strategies of differentiated services on ride-hailing platforms based on the theory of rational inattention. It explores the pricing mechanism of ride-hailing platforms under two optimization objectives (profit maximization and social welfare maximization) and three service strategies (providing both high and low differentiated services, providing a single low service, and providing a single high service). The upper level aims to maximize the profits of ride-hailing platform or social welfare, with service price and commission rate as decision variables. The lower level constructs a driver-passenger equilibrium choice model based on the theory of rational inattention. The model is solved using a combination of particle swarm optimization (PSO) algorithm and method of successive averages (MSA). The upper level model uses PSO algorithm to obtain differentiated service prices and commission rates, which are transmitted to the lower level. The lower level model uses the MSA to solve, and the obtained matching rate and maximum matching time of the driver are transmitted to the upper level. Numerical examples have verified the effectiveness of the model and algorithm. The results show that when passenger prior beliefs follow a uniform distribution, under three strategies, the platform profit shows a trend of first increasing and then decreasing with the increase of unit information cost. To ensure maximum profit, the platform should disclose the service information of ride-hailing as much as possible, but also maintain the unknownness of ride-hailing services appropriately. When the goal is to maximize social welfare, when the unit information cost is low, compared to providing a single service strategy, differentiated service strategy can better meet the differentiated choices of drivers and passengers, thereby ensuring higher social welfare. As the unit information cost increases, three strategies need to attract rational inattentive passengers to choose ride-hailing services by reducing service prices, thereby improving social welfare. 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