IDEAS home Printed from https://ideas.repec.org/a/eee/transb/v158y2022icp164-186.html
   My bibliography  Save this article

Truthful double auction mechanisms for online freight platforms with transaction costs

Author

Listed:
  • Guo, Jiantao
  • Zhang, Juliang
  • Cheng, T.C.E.
  • Zhao, Shouting

Abstract

In recent years, many online freight platforms have appeared to improve transport market efficiency. An important problem faced by such platforms is how to elicit the agents’ information and to match their supplies and demands efficiently. To address the problem, we propose the modified Multi-unit Trading Reduction and Vickery‒Clarke‒Groves (MMTR-MVCG) mechanism for considering heterogeneous transaction costs. Under this mechanism, the shippers and carriers first decide their bids, and then the platform determines the trading agents, sets the transaction prices, and matches the shippers’ demands and the carriers’ supplies. We show that this mechanism is incentive-compatible, individually rational, budget-balanced, and asymptotically efficient. For the special case with homogeneous transaction costs, we first show that the MMTR-MVCG mechanism can be simplified. In addition, we design a new double auction mechanism for the case with asymmetric demand information and homogeneous transaction costs and show that this mechanism also is incentive- compatible, individually rational, budget-balanced, and asymptotically efficient. Moreover, we conduct numerical studies to assess the impacts of transaction costs and information asymmetry on the mechanisms and compare the performance of our mechanisms with those of two commonly used mechanisms. Our mechanisms can yield greater social welfare, more trading agents, and larger trading volumes than the other two mechanisms. We also discuss the impact of the subsidy strategy.

Suggested Citation

  • Guo, Jiantao & Zhang, Juliang & Cheng, T.C.E. & Zhao, Shouting, 2022. "Truthful double auction mechanisms for online freight platforms with transaction costs," Transportation Research Part B: Methodological, Elsevier, vol. 158(C), pages 164-186.
    • Handle: RePEc:eee:transb:v:158:y:2022:i:c:p:164-186
    DOI: 10.1016/j.trb.2022.02.009
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0191261522000285
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.trb.2022.02.009?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lafkihi, Mariam & Pan, Shenle & Ballot, Eric, 2019. "Freight transportation service procurement: A literature review and future research opportunities in omnichannel E-commerce," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 125(C), pages 348-365.
    2. Yossi Sheffi, 2004. "Combinatorial Auctions in the Procurement of Transportation Services," Interfaces, INFORMS, vol. 34(4), pages 245-252, August.
    3. John O. Ledyard & Mark Olson & David Porter & Joseph A. Swanson & David P. Torma, 2002. "The First Use of a Combined-Value Auction for Transportation Services," Interfaces, INFORMS, vol. 32(5), pages 4-12, October.
    4. Cheng, Meng & Xu, Su Xiu & Huang, George Q., 2016. "Truthful multi-unit multi-attribute double auctions for perishable supply chain trading," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 93(C), pages 21-37.
    5. Xu, Su Xiu & Huang, George Q., 2014. "Efficient auctions for distributed transportation procurement," Transportation Research Part B: Methodological, Elsevier, vol. 65(C), pages 47-64.
    6. Zhang, Kenan & Nie, Yu (Marco), 2021. "To pool or not to pool: Equilibrium, pricing and regulation," Transportation Research Part B: Methodological, Elsevier, vol. 151(C), pages 59-90.
    7. Hu, Qian & Zhang, Zhenzhen & Lim, Andrew, 2016. "Transportation service procurement problem with transit time," Transportation Research Part B: Methodological, Elsevier, vol. 86(C), pages 19-36.
    8. McAfee, R. Preston, 1992. "A dominant strategy double auction," Journal of Economic Theory, Elsevier, vol. 56(2), pages 434-450, April.
    9. Leon Yang Chu & Zuo-Jun Max Shen, 2008. "Truthful Double Auction Mechanisms," Operations Research, INFORMS, vol. 56(1), pages 102-120, February.
    10. Xu, Su Xiu & Huang, George Q., 2013. "Transportation service procurement in periodic sealed double auctions with stochastic demand and supply," Transportation Research Part B: Methodological, Elsevier, vol. 56(C), pages 136-160.
    11. Zhang, Juliang & Xiang, Jie & Cheng, T.C. Edwin & Hua, Guowei & Chen, Cheng, 2019. "An optimal efficient multi-attribute auction for transportation procurement with carriers having multi-unit supplies," Omega, Elsevier, vol. 83(C), pages 249-260.
    12. Robert W. Day & S. Raghavan, 2009. "Matrix Bidding in Combinatorial Auctions," Operations Research, INFORMS, vol. 57(4), pages 916-933, August.
    13. Leon Yang Chu & Zuo-Jun Max Shen, 2006. "Agent Competition Double-Auction Mechanism," Management Science, INFORMS, vol. 52(8), pages 1215-1222, August.
    14. Roger B. Myerson, 1981. "Optimal Auction Design," Mathematics of Operations Research, INFORMS, vol. 6(1), pages 58-73, February.
    15. Leon Yang Chu, 2009. "Truthful Bundle/Multiunit Double Auctions," Management Science, INFORMS, vol. 55(7), pages 1184-1198, July.
    16. Noussair, Charles & Robin, Stephane & Ruffieux, Bernard, 1998. "The effect of transaction costs on double auction markets," Journal of Economic Behavior & Organization, Elsevier, vol. 36(2), pages 221-233, August.
    17. Che, Yeon-Koo & Condorelli, Daniele & Kim, Jinwoo, 2018. "Weak cartels and collusion-proof auctions," Journal of Economic Theory, Elsevier, vol. 178(C), pages 398-435.
    18. Su Xiu Xu & George Q. Huang & Meng Cheng, 2017. "Truthful, Budget-Balanced Bundle Double Auctions for Carrier Collaboration," Transportation Science, INFORMS, vol. 51(4), pages 1365-1386, November.
    19. Mariam Lafkihi & Shenle Pan & Eric Ballot, 2019. "Freight transportation service procurement: A literature review and future research opportunities in omnichannel E-commerce," Post-Print hal-02086154, HAL.
    20. Y Guo & A Lim & B Rodrigues & Y Zhu, 2006. "Carrier assignment models in transportation procurement," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 57(12), pages 1472-1481, December.
    21. Su Xiu Xu & George Q. Huang, 2017. "Efficient Multi‐Attribute Multi‐Unit Auctions for B2B E‐Commerce Logistics," Production and Operations Management, Production and Operations Management Society, vol. 26(2), pages 292-304, February.
    22. Masoud, Neda & Lloret-Batlle, Roger & Jayakrishnan, R., 2017. "Using bilateral trading to increase ridership and user permanence in ridesharing systems," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 102(C), pages 60-77.
    23. Wang, Xiaolei & He, Fang & Yang, Hai & Oliver Gao, H., 2016. "Pricing strategies for a taxi-hailing platform," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 93(C), pages 212-231.
    24. Sun, Jiasen & Li, Guo & Xu, Su Xiu & Dai, Wei, 2019. "Intermodal transportation service procurement with transaction costs under belt and road initiative," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 127(C), pages 31-48.
    25. Xu, Su Xiu & Cheng, Meng & Huang, George Q., 2015. "Efficient intermodal transportation auctions for B2B e-commerce logistics with transaction costs," Transportation Research Part B: Methodological, Elsevier, vol. 80(C), pages 322-337.
    26. Huang, George Q. & Xu, Su Xiu, 2013. "Truthful multi-unit transportation procurement auctions for logistics e-marketplaces," Transportation Research Part B: Methodological, Elsevier, vol. 47(C), pages 127-148.
    27. Huang, Min & Qian, Xiaohu & Fang, Shu-Cherng & Wang, Xingwei, 2016. "Winner determination for risk aversion buyers in multi-attribute reverse auction," Omega, Elsevier, vol. 59(PB), pages 184-200.
    28. Groves, Theodore, 1973. "Incentives in Teams," Econometrica, Econometric Society, vol. 41(4), pages 617-631, July.
    29. Liang, Renchao & Wang, Junwei & Huang, Min & Jiang, Zhong-Zhong, 2020. "Truthful auctions for e-market logistics services procurement with quantity discounts," Transportation Research Part B: Methodological, Elsevier, vol. 133(C), pages 165-180.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yu, Hao & Huang, Min & Chao, Xiuli & Yue, Xiaohang, 2022. "Truthful multi-attribute multi-unit double auctions for B2B e-commerce logistics service transactions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 164(C).
    2. Park, Arim & Chen, Roger & Cho, Soohyun & Zhao, Yao, 2023. "The determinants of online matching platforms for freight services," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yu, Hao & Huang, Min & Chao, Xiuli & Yue, Xiaohang, 2022. "Truthful multi-attribute multi-unit double auctions for B2B e-commerce logistics service transactions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 164(C).
    2. Sun, Jiasen & Li, Guo & Xu, Su Xiu & Dai, Wei, 2019. "Intermodal transportation service procurement with transaction costs under belt and road initiative," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 127(C), pages 31-48.
    3. Lafkihi, Mariam & Pan, Shenle & Ballot, Eric, 2019. "Freight transportation service procurement: A literature review and future research opportunities in omnichannel E-commerce," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 125(C), pages 348-365.
    4. Zhang, Juliang & Xiang, Jie & Cheng, T.C. Edwin & Hua, Guowei & Chen, Cheng, 2019. "An optimal efficient multi-attribute auction for transportation procurement with carriers having multi-unit supplies," Omega, Elsevier, vol. 83(C), pages 249-260.
    5. Liang, Renchao & Wang, Junwei & Huang, Min & Jiang, Zhong-Zhong, 2020. "Truthful auctions for e-market logistics services procurement with quantity discounts," Transportation Research Part B: Methodological, Elsevier, vol. 133(C), pages 165-180.
    6. Xiao, Haohan & Xu, Meng & Gao, Ziyou, 2018. "Shared parking problem: A novel truthful double auction mechanism approach," Transportation Research Part B: Methodological, Elsevier, vol. 109(C), pages 40-69.
    7. Kong, Xiang T.R. & Kang, Kai & Zhong, Ray Y. & Luo, Hao & Xu, Su Xiu, 2021. "Cyber physical system-enabled on-demand logistics trading," International Journal of Production Economics, Elsevier, vol. 233(C).
    8. Cheng, Meng & Xu, Su Xiu & Huang, George Q., 2016. "Truthful multi-unit multi-attribute double auctions for perishable supply chain trading," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 93(C), pages 21-37.
    9. Briand, Martin & Franklin, Rod & Lafkihi, Mariam, 2022. "A dynamic routing protocol with payments for the Physical Internet: A simulation with learning agents," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 166(C).
    10. Xu, Su Xiu & Huang, George Q., 2013. "Transportation service procurement in periodic sealed double auctions with stochastic demand and supply," Transportation Research Part B: Methodological, Elsevier, vol. 56(C), pages 136-160.
    11. Su Xiu Xu & George Q. Huang & Meng Cheng, 2017. "Truthful, Budget-Balanced Bundle Double Auctions for Carrier Collaboration," Transportation Science, INFORMS, vol. 51(4), pages 1365-1386, November.
    12. Ding, Xiaoshu & Qi, Qi & Jian, Sisi, 2024. "Truthful online double auctions for on-demand integrated ride-sourcing platforms," European Journal of Operational Research, Elsevier, vol. 317(3), pages 737-747.
    13. Huang, George Q. & Xu, Su Xiu, 2013. "Truthful multi-unit transportation procurement auctions for logistics e-marketplaces," Transportation Research Part B: Methodological, Elsevier, vol. 47(C), pages 127-148.
    14. Xu, Su Xiu & Cheng, Meng & Huang, George Q., 2015. "Efficient intermodal transportation auctions for B2B e-commerce logistics with transaction costs," Transportation Research Part B: Methodological, Elsevier, vol. 80(C), pages 322-337.
    15. Eirinakis, Pavlos & Mourtos, Ioannis & Zampou, Eleni, 2022. "Random Serial Dictatorship for horizontal collaboration in logistics," Omega, Elsevier, vol. 111(C).
    16. Wang, Junjin & Liu, Jiaguo & Zhang, Xin, 2020. "Service purchasing and market-entry problems in a shipping supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    17. Mashalah, Heider Al & Hassini, Elkafi & Gunasekaran, Angappa & Bhatt (Mishra), Deepa, 2022. "The impact of digital transformation on supply chains through e-commerce: Literature review and a conceptual framework," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 165(C).
    18. Zhang, Li-Hao & Liu, Chunxiao & Zhang, Cheng & Wang, Shanshan, 2023. "Upstream encroachment and downstream outsourcing in competing shipping supply chains," International Journal of Production Economics, Elsevier, vol. 255(C).
    19. Xu, Su Xiu & Huang, George Q., 2014. "Efficient auctions for distributed transportation procurement," Transportation Research Part B: Methodological, Elsevier, vol. 65(C), pages 47-64.
    20. Kuyzu, Gültekin & Akyol, Çağla Gül & Ergun, Özlem & Savelsbergh, Martin, 2015. "Bid price optimization for truckload carriers in simultaneous transportation procurement auctions," Transportation Research Part B: Methodological, Elsevier, vol. 73(C), pages 34-58.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transb:v:158:y:2022:i:c:p:164-186. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/548/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.