Once upon a time, my research interests were in microeconomic theory, industrial organization, and behavioral economics.
Myopia in dynamic spatial games (with Rebekah Dix)
We design an experiment to evaluate behavior in a dynamic spatial game representing the incentives faced by drivers for a ride-sharing service while waiting to be matched with a rider. The design is unique in that it allows us to observe not only participants' choices, but also the considerations that went into those choices. The results of the experiment show that a large majority of player choices are consistent with myopic best responding. A myopic best response maximizes a player's flow payoff at the time of the decision but is not necessarily optimal as it ignores strategic considerations regarding the future choices of opponents. Given the observed prevalence of this behavior and the challenges of equilibrium analysis, which we detail, we argue in favor of computational models of spatial competition built upon myopic agents. Myopic behavior in our model results in quite efficient outcomes, suggesting that ride-sharing companies may benefit from sharing with drivers the locations of other nearby drivers to allow them to compete spatially.
Computing optimal spatial allocations is important for two reasons. First, one may wish to implement them. Second, without a sense of an optimal spatial allocation, one cannot evaluate the efficiency of an observed spatial allocation. Suppose you have p facilities and wish to place them in a city to minimize the average distance between a consumer and her nearest facility. We develop a neighborhood search heuristic for this p-median problem with continuous demand. We discuss challenges to implementing the heuristic, propose solutions, and describe how it can be embedded in hybrid heuristics. We then apply the heuristic to computing optimal spatial allocations of facilities in Chicago, Atlanta, and Los Angeles. In comparing these optimal allocations to the actual ones, we find that allocations of supermarkets do relatively poorly in minimizing transportation costs for consumers.