IDEAS home Printed from https://ideas.repec.org/a/spr/annopr/v239y2016i2d10.1007_s10479-014-1647-x.html
   My bibliography  Save this article

Decentralized optimization of last-mile delivery services with non-cooperative bounded rational customers

Author

Listed:
  • Yezekael Hayel

    (LIA/CERI)

  • Dominique Quadri

    (LRI)

  • Tania Jiménez

    (LIA/CERI)

  • Luce Brotcorne

    (INRIA)

Abstract

The goal of this paper is to introduce bounded rational behaviors in a competitive queuing system. Furthermore, we propose a realistic queuing model for two last-mile delivery services in which consumers are in competition. This work is derived from a real-world e-commerce application. We study the problem using a game theoretical point of view: the e-consumers are interacting through the last-mile delivery service system creating congestion for each other. Specifically, we focus our analysis on several equilibrium concepts from congestion/routing games: Wardrop and Logit equilibria. The difference in these equilibrium concepts is on the rationality level of players in the game. We are able to prove the existence and uniqueness of both equilibria. We compare them through a new metric called the Price of Rationality and we also compare each one to the social optimum solution through the Price of Anarchy. Some numerical results are presented in order to illustrate the theoretical results obtained.

Suggested Citation

  • Yezekael Hayel & Dominique Quadri & Tania Jiménez & Luce Brotcorne, 2016. "Decentralized optimization of last-mile delivery services with non-cooperative bounded rational customers," Annals of Operations Research, Springer, vol. 239(2), pages 451-469, April.
    • Handle: RePEc:spr:annopr:v:239:y:2016:i:2:d:10.1007_s10479-014-1647-x
    DOI: 10.1007/s10479-014-1647-x
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10479-014-1647-x
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10479-014-1647-x?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. McKelvey Richard D. & Palfrey Thomas R., 1995. "Quantal Response Equilibria for Normal Form Games," Games and Economic Behavior, Elsevier, vol. 10(1), pages 6-38, July.
    2. Agatz, Niels A.H. & Fleischmann, Moritz & van Nunen, Jo A.E.E., 2008. "E-fulfillment and multi-channel distribution - A review," European Journal of Operational Research, Elsevier, vol. 187(2), pages 339-356, June.
    3. Simon P. Anderson & Jacob K. Goeree & Charles A. Holt, 2002. "The Logit Equilibrium: A Perspective on Intuitive Behavioral Anomalies," Southern Economic Journal, John Wiley & Sons, vol. 69(1), pages 21-47, July.
    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. Juan Guillermo Urzúa-Morales & Juan Pedro Sepulveda-Rojas & Miguel Alfaro & Guillermo Fuertes & Rodrigo Ternero & Manuel Vargas, 2020. "Logistic Modeling of the Last Mile: Case Study Santiago, Chile," Sustainability, MDPI, vol. 12(2), pages 1-18, January.
    2. Tang, Yuk Ming & Chau, Ka Yin & Xu, Duo & Liu, Xiaoyun, 2021. "Consumer perceptions to support IoT based smart parcel locker logistics in China," Journal of Retailing and Consumer Services, Elsevier, vol. 62(C).
    3. Zhang, Wenwei & Xu, Min & Wang, Shuaian, 2023. "Joint location and pricing optimization of self-service in urban logistics considering customers’ choice behavior," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 174(C).
    4. Lin Zhou & Xu Wang & Lin Ni & Yun Lin, 2016. "Location-Routing Problem with Simultaneous Home Delivery and Customer’s Pickup for City Distribution of Online Shopping Purchases," Sustainability, MDPI, vol. 8(8), pages 1-20, August.
    5. Li, Qiaoru & Wang, Yuanyuan & Li, Kun & Chen, Liang & Wei, Zhenlin, 2019. "Evolutionary dynamics of the last mile travel choice," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 536(C).
    6. Yandong He & Xu Wang & Yun Lin & Fuli Zhou, 2016. "Optimal Partner Combination for Joint Distribution Alliance using Integrated Fuzzy EW-AHP and TOPSIS for Online Shopping," Sustainability, MDPI, vol. 8(4), pages 1-18, April.
    7. Ghosh, Souvik & Hassin, Refael, 2021. "Inefficiency in stochastic queueing systems with strategic customers," European Journal of Operational Research, Elsevier, vol. 295(1), pages 1-11.
    8. John Olsson & Daniel Hellström & Henrik Pålsson, 2019. "Framework of Last Mile Logistics Research: A Systematic Review of the Literature," Sustainability, MDPI, vol. 11(24), pages 1-25, December.
    9. Zhuo Sun & Ni Yan & Yining Sun & Haobin Li, 2019. "Location-Routing Optimization with Split Demand for Customer Self-Pickup via Data Analysis and Heuristics Search," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 36(06), pages 1-24, December.
    10. Chen Wei & Sobhan Asian & Gurdal Ertek & Zhi-Hua Hu, 2020. "Location-based pricing and channel selection in a supply chain: a case study from the food retail industry," Annals of Operations Research, Springer, vol. 291(1), pages 959-984, August.

    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. Benaïm, Michel & Hofbauer, Josef & Hopkins, Ed, 2009. "Learning in games with unstable equilibria," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1694-1709, July.
    2. Philip A. Haile & Ali Hortaçsu & Grigory Kosenok, 2008. "On the Empirical Content of Quantal Response Equilibrium," American Economic Review, American Economic Association, vol. 98(1), pages 180-200, March.
    3. Changping Zhao & Yecheng Wang & Tianxiang Zhang & Qingbo Huang & Yu Gong, 2019. "The Game Simulation of “The Belt and Road” Economic and Trade Network Based on the Asymmetric QRE Model," Sustainability, MDPI, vol. 11(12), pages 1-17, June.
    4. Dagsvik, John K., 2020. "Equilibria in Logit Models of Social Interaction and Quantal Response Equilibrium," HERO Online Working Paper Series 2020:5, University of Oslo, Health Economics Research Programme, revised 09 Mar 2023.
    5. Yanan Song & Xiaobo Zhao, 2017. "A newsvendor problem with boundedly rational strategic customers," International Journal of Production Research, Taylor & Francis Journals, vol. 55(1), pages 228-243, January.
    6. James Costain & Anton Nakov, 2019. "Logit Price Dynamics," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 51(1), pages 43-78, February.
    7. Paraskevas Lekeas & Giorgos Stamatopoulos, 2014. "Cooperative oligopoly games with boundedly rational firms," Annals of Operations Research, Springer, vol. 223(1), pages 255-272, December.
    8. Yefen Chen & Xuanming Su & Xiaobo Zhao, 2012. "Modeling Bounded Rationality in Capacity Allocation Games with the Quantal Response Equilibrium," Management Science, INFORMS, vol. 58(10), pages 1952-1962, October.
    9. Subhasish Dugar & Arnab Mitra, 2016. "Bertrand Competition With Asymmetric Marginal Costs," Economic Inquiry, Western Economic Association International, vol. 54(3), pages 1631-1647, July.
    10. Golman, Russell, 2012. "Homogeneity bias in models of discrete choice with bounded rationality," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 1-11.
    11. Claudia Neri, 2015. "Quantal response equilibrium in a double auction," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 3(1), pages 79-90, April.
    12. Charles A. Holt & Ricky Sahu & Angela M. Smith, 2022. "An experimental analysis of risk effects in attacker‐defender games," Southern Economic Journal, John Wiley & Sons, vol. 89(1), pages 185-215, July.
    13. Topolyan, Iryna, 2017. "Price competition when three are few and four are many," International Journal of Industrial Organization, Elsevier, vol. 54(C), pages 175-191.
    14. Jim Engle-Warnick & Ed Hopkins, 2006. "A Simple Test of Learning Theory," Levine's Bibliography 321307000000000724, UCLA Department of Economics.
    15. Charles A. Holt, 2003. "Economic Science: An Experimental Approach for Teaching and Research," Southern Economic Journal, John Wiley & Sons, vol. 69(4), pages 754-771, April.
    16. Li, Yan & Chen, Yefen & Shou, Biying & Zhao, Xiaobo, 2019. "Oligopolistic quantity competition with bounded rationality and social comparison," International Journal of Production Economics, Elsevier, vol. 211(C), pages 180-196.
    17. Alexander Matros & Wooyoung Lim & Theodore Turocy, 2009. "Raising Revenue With Raffles: Evidence from a Laboratory Experiment," Working Paper 377, Department of Economics, University of Pittsburgh, revised Feb 2009.
    18. Schmutzler, Armin, 2011. "A unified approach to comparative statics puzzles in experiments," Games and Economic Behavior, Elsevier, vol. 71(1), pages 212-223, January.
    19. Smith, Angela M., 2011. "An experimental study of exclusive contracts," International Journal of Industrial Organization, Elsevier, vol. 29(1), pages 4-13, January.
    20. Wang, Bingtong & Li, Zhibin & Wang, Shunchao & Li, Meng & Ji, Ang, 2022. "Modeling bounded rationality in discretionary lane change with the quantal response equilibrium of game theory," Transportation Research Part B: Methodological, Elsevier, vol. 164(C), pages 145-161.

    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:spr:annopr:v:239:y:2016:i:2:d:10.1007_s10479-014-1647-x. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.