840. Does carrier collaboration really require combinatorial auctions?
Invited abstract in session WC-56: Logistics, stream Vehicle Routing and Logistics.
Wednesday, 12:30-14:00Room: Liberty 1.11
Authors (first author is the speaker)
| 1. | Rudolf Vetschera
|
| Dept. of Business Decisions and Analytics, University of Vienna | |
| 2. | Dmitriy Knyazev
|
| Business Decisions and Analytics, University of Vienna |
Abstract
Most approaches to carrier collaboration in logistics use combinatorial auctions, in which bundles of requests are priced and traded as entities. Literature argues that combinatorial auctions must be used because positive or negative synergies between requests exist, leading to non-additive valuations of bundles. However, economic theory shows that subadditivity is a sufficient, but not a necessary condition for the existence of a Walrasian equilibrium in which goods are priced individually. Thus it is possible that an efficient allocation of requests could be achieved by pricing and trading requests individually. We perform a large scale computational study to test how often an efficient allocation can actually be achieved by individual pricing. In the study, we consider capacitated TSP problem where a set of additional requests is allocated to carriers who already have to serve a set of requests. We then test whether there exists a set of prices so that each carrier demands the requests the carrier should serve in the efficient allocation. Our results indicate that, depending on the geographical configuration of requests, this is frequently possible. Furthermore, pricing entire bundles does not always support the efficient allocation either. Contrary to expectations, we also find that proprieties such as the number of violations of subadditivity have only a relatively small influence on the possibility to support an efficient allocation of requests.
Keywords
- Logistics
- Auctions / Competitive Bidding
Status: accepted
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