Truthful, Budget-Balanced Bundle Double Auctions for Carrier Collaboration

This paper aims to propose effective auction mechanisms for the carrier collaboration problem with bilateral exchange, which is generally the problem of how to realize the potential of carrier collaboration over a bilateral exchange transportation network (e.g., a B2B e-commerce logistics environment). Carriers offer the lanes with the highest marginal costs for subcontracting, while they are allowed to bid on bundles of the lanes. We construct a bundle double auction (BDA) for the one-unit demand case in which the lane offered by each buyer (transportation service purchaser) is only required to be covered with one truckload once. The BDA mechanism realizes incentive compatibility, individual rationality, budget balance, and asymptotical efficiency. We then propose two mechanisms, called BDA-1 and BDA-2, for the multiunit demand case in which each buyer asks for one or multiple truckloads of transportation service. Both mechanisms are effective but differ in incentive compatibility and realized social wel...

[1]  Gilbert Laporte,et al.  Horizontal cooperation among freight carriers: request allocation and profit sharing , 2008, J. Oper. Res. Soc..

[2]  Sven de Vries,et al.  Combinatorial Auctions: A Survey , 2003, INFORMS J. Comput..

[3]  R. McAfee,et al.  A dominant strategy double auction , 1992 .

[4]  Alan Scheller-Wolf,et al.  Design of a Multi–Unit Double Auction E–Market , 2002, Comput. Intell..

[5]  Fikri Karaesmen,et al.  Modeling and analysis of an auction-based logistics market , 2008, Eur. J. Oper. Res..

[6]  Herbert Kopfer,et al.  Collaborating freight forwarding enterprises , 2006, OR Spectr..

[7]  Hani S. Mahmassani,et al.  Train Slot Cooperation in Multicarrier, International Rail-Based Intermodal Freight Transport , 2008 .

[8]  Leon Yang Chu.  Truthful Bundle/Multiunit Double Auctions , 2009, Manag. Sci..

[9]  Chi-Guhn Lee,et al.  A stochastic programming winner determination model for truckload procurement under shipment uncertainty , 2010 .

[10]  Özlem Ergun,et al.  Allocating Costs in a Collaborative Transportation Procurement Network , 2008, Transp. Sci..

[11]  Christian Bierwirth,et al.  Solutions to the request reassignment problem in collaborative carrier networks , 2010 .

[12]  Fred Glover,et al.  Tabu Search - Part II , 1989, INFORMS J. Comput..

[13]  Yossi Sheffi,et al.  Combinatorial Auctions in the Procurement of Transportation Services , 2004, Interfaces.

[14]  Amitabh Sinha,et al.  Solving Truckload Procurement Auctions Over an Exponential Number of Bundles , 2009, Transp. Sci..

[15]  Martin W. P. Savelsbergh,et al.  Reducing Truckload Transportation Costs Through Collaboration , 2007, Transp. Sci..

[16]  Elise Miller-Hooks,et al.  Developing Responsive Rail Services through collaboration , 2012 .

[17]  A. Regan,et al.  Approximation Algorithms for the Bid Construction Problem in Combinatorial Auctions for the Procurement of Freight Transportation Contracts , 2003 .

[18]  George Q. Huang,et al.  Efficient auctions for distributed transportation procurement , 2014 .

[19]  M. Satterthwaite,et al.  Efficient Mechanisms for Bilateral Trading , 1983 .

[20]  George Q. Huang,et al.  Truthful multi-unit transportation procurement auctions for logistics e-marketplaces , 2013 .

[21]  Noam Nisan,et al.  Bidding and allocation in combinatorial auctions , 2000, EC '00.

[22]  Rodrigo A. Garrido,et al.  Procurement of transportation services in spot markets under a double-auction scheme with elastic demand , 2007 .

[23]  George Q. Huang,et al.  Transportation service procurement in periodic sealed double auctions with stochastic demand and supply , 2013 .

[24]  George Q. Huang,et al.  Efficient intermodal transportation auctions for B2B e-commerce logistics with transaction costs , 2015 .

[25]  Nabila Remli,et al.  A robust winner determination problem for combinatorial transportation auctions under uncertain shipment volumes , 2013 .

[26]  Martin W. P. Savelsbergh,et al.  Lane-Exchange Mechanisms for Truckload Carrier Collaboration , 2011, Transp. Sci..

[27]  E. H. Clarke.  Multipart pricing of public goods , 1971 .

[28]  Theodore Groves,et al.  Incentives in Teams , 1973 .

[29]  William Vickrey,et al.  Counterspeculation, Auctions, And Competitive Sealed Tenders , 1961 .

[30]  Miguel A. Figliozzi,et al.  Analysis and Evaluation of Incentive Compatible Dynamic Mechanisms for Carrier Collaboration , 2006 .

[31]  Hani S. Mahmassani,et al.  Pricing in Dynamic Vehicle Routing Problems , 2007, Transp. Sci..

[32]  George Q. Huang,et al.  Auction-based transportation procurement in make-to-order systems , 2015 .

[33]  Tsung-Sheng Chang,et al.  Decision support for truckload carriers in one-shot combinatorial auctions , 2009 .