Simulation of the Worst Failure Probability of Sharing Platform under Unknown Demand Distribution

Abstract

The sharing economy integrates the idle resources to match the fragmented market demand via the Internet platform. Different from the supply side, the demand is highly uncertain, in which, significant spikes and valleys exist. Therefore, it is assumed that only the statistical characteristics, instead of precise distributions, are known. The matching efficiency of supply and demand in sharing platform is studied. Firstly, a linear programming model under the moment constraints is proposed to describe the worst failure possibility in demand satisfaction. Then, the equivalent semi-infinite program is developed by Lagrange duality, and the analytical expression of the worst failure probability can be given. Finally, simulation study is implemented. This work not only riches the studies of moment-based bound, but also provides the managerial insights to the demand management of the sharing platform in the uncertain setting.