The value of information in auction-based carrier collaborations

Given an increasing pressure to act economically and ecologically efficient, mechanisms to benefit from idle capacities are on the rise. In this “sharing economy”, carrier collaborations are a key concept. We assess the benefit of sharing information in auction-based carrier collaborations where carriers seek to exchange transportation requests in order to decrease vehicle mileage and increase vehicle utilization. Even though carriers are unlikely to share sensitive or business-critical information, they may be willing to share non-sensitive and non-critical information if it increases their profit. We explore the benefit of carriers providing aggregate information about their transportation requests to assist in the selection of transportation requests to enter into the auction, and of carriers providing partial valuation information on the transportation requests that have been entered into the auction. The auction and the information shared are designed and chosen in such a way that carriers feel secure and confident that no sensitive or critical information gets in the hands of the competition. We discuss how the shared information can be exploited within the auction process to enhance the auction's effectiveness and to reduce the cost of decentralization. A computational study demonstrates the value of the additionally shared information. However, the study also illustrates that choosing the (non-revealing) information that is shared has to be done carefully, because otherwise no benefits may be realized.