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Reverse auctions with transportation and convex costs

Author

Listed:
  • Benjamin Heymann

    (Criteo)

  • Alejandro Jofré

    (Universidad de Chile)

Abstract

We discuss a procurement problem with transportation losses and piecewise linear production costs. We first provide an algorithm based on Knaster-Tarski’s fixed point theorem to solve the allocation problem in the quadratic losses case. We then identify a monotony condition on the types distribution under which the Bayesian cost minimizing mechanism takes a simple form.

Suggested Citation

  • Benjamin Heymann & Alejandro Jofré, 2024. "Reverse auctions with transportation and convex costs," Computational Management Science, Springer, vol. 21(1), pages 1-18, June.
    • Handle: RePEc:spr:comgts:v:21:y:2024:i:1:d:10.1007_s10287-023-00498-4
    DOI: 10.1007/s10287-023-00498-4
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    References listed on IDEAS

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    6. Roger B. Myerson, 1981. "Optimal Auction Design," Mathematics of Operations Research, INFORMS, vol. 6(1), pages 58-73, February.
    7. Cho, In-Koo, 2003. "Competitive Equilibrium in a Radial Network," RAND Journal of Economics, The RAND Corporation, vol. 34(3), pages 438-460, Autumn.
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