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The cost of incentive compatibility in auction‐based mechanisms for carrier collaboration

Collaboration has been one of the important trends in vehicle routing. A typical mechanism to enable carrier collaboration is to use combinatorial auctions, where requests are not traded individually but are combined into bundles. Previous literature on carrier collaboration has focused on issues su...

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Detalles Bibliográficos
Autores principales: Gansterer, Margaretha, Hartl, Richard F., Vetschera, Rudolf
Formato: Online Artículo Texto
Lenguaje:English
Publicado: John Wiley and Sons Inc. 2018
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6582527/
https://www.ncbi.nlm.nih.gov/pubmed/31244493
http://dx.doi.org/10.1002/net.21828
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author Gansterer, Margaretha
Hartl, Richard F.
Vetschera, Rudolf
author_facet Gansterer, Margaretha
Hartl, Richard F.
Vetschera, Rudolf
author_sort Gansterer, Margaretha
collection PubMed
description Collaboration has been one of the important trends in vehicle routing. A typical mechanism to enable carrier collaboration is to use combinatorial auctions, where requests are not traded individually but are combined into bundles. Previous literature on carrier collaboration has focused on issues such as bundle formation or winner determination, typically assuming truthfulness of all agents and absence of any strategic behavior. This article considers the interdependencies and problems that arise from bidders acting as buyers and sellers of requests at the same time. From standard auction theory, desirable properties of exchange mechanisms are identified as efficiency, incentive compatibility, individual rationality, and budget balance. It is shown that these desirable properties cannot be fulfilled at the same time. In particular, the properties efficiency and incentive compatibility induce that budget balance is violated, that is, an outside subsidy is required. We propose two incentive compatible exchange mechanisms. One is more closely related to the classical VCG approach, while the other one uses a more complicated concept for computing payments to participants. A numerical study investigates how frequently desired properties are violated. We show that both mechanisms can be acceptable in practical situations, but none of them can satisfy all desired properties.
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spelling pubmed-65825272019-06-24 The cost of incentive compatibility in auction‐based mechanisms for carrier collaboration Gansterer, Margaretha Hartl, Richard F. Vetschera, Rudolf Networks (N Y) Special Issue Articles Collaboration has been one of the important trends in vehicle routing. A typical mechanism to enable carrier collaboration is to use combinatorial auctions, where requests are not traded individually but are combined into bundles. Previous literature on carrier collaboration has focused on issues such as bundle formation or winner determination, typically assuming truthfulness of all agents and absence of any strategic behavior. This article considers the interdependencies and problems that arise from bidders acting as buyers and sellers of requests at the same time. From standard auction theory, desirable properties of exchange mechanisms are identified as efficiency, incentive compatibility, individual rationality, and budget balance. It is shown that these desirable properties cannot be fulfilled at the same time. In particular, the properties efficiency and incentive compatibility induce that budget balance is violated, that is, an outside subsidy is required. We propose two incentive compatible exchange mechanisms. One is more closely related to the classical VCG approach, while the other one uses a more complicated concept for computing payments to participants. A numerical study investigates how frequently desired properties are violated. We show that both mechanisms can be acceptable in practical situations, but none of them can satisfy all desired properties. John Wiley and Sons Inc. 2018-06-27 2019-06 /pmc/articles/PMC6582527/ /pubmed/31244493 http://dx.doi.org/10.1002/net.21828 Text en © 2018 The Authors Networks Published by Wiley Periodicals, Inc. This is an open access article under the terms of the http://creativecommons.org/licenses/by/4.0/ License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.
spellingShingle Special Issue Articles
Gansterer, Margaretha
Hartl, Richard F.
Vetschera, Rudolf
The cost of incentive compatibility in auction‐based mechanisms for carrier collaboration
title The cost of incentive compatibility in auction‐based mechanisms for carrier collaboration
title_full The cost of incentive compatibility in auction‐based mechanisms for carrier collaboration
title_fullStr The cost of incentive compatibility in auction‐based mechanisms for carrier collaboration
title_full_unstemmed The cost of incentive compatibility in auction‐based mechanisms for carrier collaboration
title_short The cost of incentive compatibility in auction‐based mechanisms for carrier collaboration
title_sort cost of incentive compatibility in auction‐based mechanisms for carrier collaboration
topic Special Issue Articles
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6582527/
https://www.ncbi.nlm.nih.gov/pubmed/31244493
http://dx.doi.org/10.1002/net.21828
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