Marginal effect
Marginal effect. Pull up the following article
https://www.nytimes.com/interactive/2017/04/02/technology/uber-drivers-psychologicaltricks.html
Scroll about eight paragraphs down, to the simulation titled: “Faster pickup times mean more idle drivers.”
(a) There are two variables in the simulation. Identify the function (the variable that matters, but outside of Uber’s control) and the factor (the variable that does not matter, but is under Uber’s control)
Y is …
X is …
(b) Run the simulation to fill out the table below. The formula for marginal effect is:
MEy yB yA
x xB xA
| Observation | # drivers | Waiting time | Marginal effect |
| A | 50 | ————- | |
| B | 75 | ||
| C | 125 | ||
| D | 250 |
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