Envy-free Pricing for Collaborative Consumption of Supply in Transportation Systems

Abstract: Consumption of supply in transportation systems has generally always followed a First-Come-First-Served (FCFS) rule. This article proposes new control policies based on the concept of envy-freeness which outperform FCFS in both efficiency and fairness. We call an allocation envy-free when no agent feels any other agent’s allocation to be better than their own, at the current price. Envy-free allocations are thus considered fair. Several new contributions are made: we first present a conceptual theoretical supply-demand framework which formally introduces the new supply paradigm. We propose and simulate a new problem, queue-jumping operations on highways, in which vehicles can skip positions in a queue and compensate the overtaken vehicles with a payment. We present a new concept, dynamic envy-freeness, and provide a new envy ranking criterion, Constant Elasticity of Substitution Envy Intensity (CESEI) that is applied to PEXIC, an exchange-based traffic signal control scheme.