Randomized FIFO Mechanisms


Friday, October 29, 2021, 1:00pm


SEC 2.118 or read more below for streaming information

Presenter:  Hongyao Ma
Topic:  Randomized FIFO Mechanisms

Fall 2021

The EconCS Group holds an Economics and Computer Science research seminar each semester.

Fall 2021 meetings are held at 1 - 2:30 PM on Fridays. Seminar Coordinators for Fall '21 are Srivatsa R Sai and Daniel Halpern.

Stream here


We study the matching of jobs to workers in a queue, e.g. a ridesharing platform dispatching drivers to pick up riders at an airport. Under FIFO dispatching, the heterogeneity in trip earnings incentivizes drivers to cherry-pick, increasing riders' waiting time for a match and resulting in a loss of efficiency and reliability. We first present the direct FIFO mechanism, which offers lower-earning trips to drivers further down the queue. The option to skip the rest of the line incentivizes drivers to accept all dispatches, but the mechanism would be considered unfair since drivers closer to the head of the queue may have lower priority for trips to certain destinations. To avoid the use of unfair dispatch rules, we introduce a family of randomized FIFO mechanisms, which send declined trips gradually down the queue in a randomized manner. We prove that a randomized FIFO mechanism achieves the first best throughput and the second-best revenue in equilibrium. Extensive counterfactual simulations using data from the City of Chicago demonstrate substantial improvements of revenue and throughput, highlighting the effectiveness of using waiting times to align incentives and reduce the variability in driver earnings.

Joint work with Francisco Castro, Hamid Nazerzadeh, and Chiwei Yan.

Bio: Hongyao Ma is an Assistant Professor in the Decision, Risk, and Operations division at Columbia Business School. Her research is situated at the interface of computer science, economics, and operations, with a particular focus on market design. Hongyao completed her Ph.D. in Computer Science at Harvard University in 2019, and worked as a postdoctoral researcher at Uber and then Caltech during 2019-2020. She obtained her M.S. in 2014 at Harvard, and B.E. in 2012 at Xi'an Jiaotong University, both in Electrical Engineering. She received the ACM SIGecom Doctoral Dissertation Award in 2020, a Siebel Scholarship 2017-2018, and a Certificate of Distinction in Teaching at Harvard in 2014.