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Random Serial Dictatorship for horizontal collaboration in logistics

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  • Eirinakis, Pavlos
  • Mourtos, Ioannis
  • Zampou, Eleni

Abstract

In this paper, we propose the application of matching mechanisms to handle horizontal collaboration in logistics. Based on the requirements of a real-life setting, we introduce a new variation of matching under preferences. We provide a Random Serial Dictatorship (RSD) mechanism for finding a solution that incorporates Pareto optimality, incentive compatibility and fairness, which are desired properties for enabling collaboration between antagonistic participants. Further, we present an extensive experimental analysis that is twofold. We compare the proposed RSD mechanism to two well-known matching mechanisms, namely Maximising Cardinal Utilities (MAXCU) and Bundled Probabilistic Serial (BPS). We compare these mechanisms with respect to cardinal efficiency and envy, and highlight the complementarity between them for handling different settings. Most importantly, we show that RSD is the most appropriate choice for settings similar to the one motivating our study. Moreover, we examine the effect of randomisation of RSD to fairness. Finally, we discuss how our matching mechanism was applied in the real-life context of four 3rd Party Logistics providers. Results show that the proposed approach creates significant potential for synergies and may be used to support horizontal collaboration in logistics.

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  • Eirinakis, Pavlos & Mourtos, Ioannis & Zampou, Eleni, 2022. "Random Serial Dictatorship for horizontal collaboration in logistics," Omega, Elsevier, vol. 111(C).
    • Handle: RePEc:eee:jomega:v:111:y:2022:i:c:s030504832200069x
    DOI: 10.1016/j.omega.2022.102662
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