Dynamic threshold policy for delaying and breaking commitments in transportation auctions

Martijn R.K. Mes; Matthijs C. van der Heijden; Peter Schuur

doi:10.1016/j.trc.2008.03.001

Dynamic threshold policy for delaying and breaking commitments in transportation auctions

Martijn R.K. Mes, Matthijs C. van der Heijden, Peter Schuur

Faculty of Behavioural, Management and Social Sciences

Research output: Contribution to journal › Article › Academic › peer-review

15 Citations (Scopus)

7 Downloads (Pure)

Abstract

In this paper we consider a transportation procurement auction consisting of shippers and carriers. Shippers offer time sensitive pickup and delivery jobs and carriers bid on these jobs. We focus on revenue maximizing strategies for the shippers in sequential auctions. For this purpose we propose two strategies, namely delaying and breaking commitments. The idea of delaying commitments is that a shipper will not agree with the best bid whenever it is above a certain reserve price. The idea of breaking commitments is that the shipper allows the carriers to break commitments against certain penalties. We evaluate the benefits of both strategies with simulation. In addition, we provide insight into the distribution of the lowest bid which is estimated by the shippers.

Original language	English
Pages (from-to)	208-223
Number of pages	16
Journal	Transportation research. Part C: Emerging technologies
Volume	17
Issue number	2
DOIs	https://doi.org/10.1016/j.trc.2008.03.001
Publication status	Published - 2009

Keywords

Leveled commitment
Freight transportation
METIS-256656
Auctions
IR-79338
Electronic markets

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10.1016/j.trc.2008.03.001

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title = "Dynamic threshold policy for delaying and breaking commitments in transportation auctions",

abstract = "In this paper we consider a transportation procurement auction consisting of shippers and carriers. Shippers offer time sensitive pickup and delivery jobs and carriers bid on these jobs. We focus on revenue maximizing strategies for the shippers in sequential auctions. For this purpose we propose two strategies, namely delaying and breaking commitments. The idea of delaying commitments is that a shipper will not agree with the best bid whenever it is above a certain reserve price. The idea of breaking commitments is that the shipper allows the carriers to break commitments against certain penalties. We evaluate the benefits of both strategies with simulation. In addition, we provide insight into the distribution of the lowest bid which is estimated by the shippers.",

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AU - Mes, Martijn R.K.

AU - van der Heijden, Matthijs C.

AU - Schuur, Peter

PY - 2009

Y1 - 2009

N2 - In this paper we consider a transportation procurement auction consisting of shippers and carriers. Shippers offer time sensitive pickup and delivery jobs and carriers bid on these jobs. We focus on revenue maximizing strategies for the shippers in sequential auctions. For this purpose we propose two strategies, namely delaying and breaking commitments. The idea of delaying commitments is that a shipper will not agree with the best bid whenever it is above a certain reserve price. The idea of breaking commitments is that the shipper allows the carriers to break commitments against certain penalties. We evaluate the benefits of both strategies with simulation. In addition, we provide insight into the distribution of the lowest bid which is estimated by the shippers.

AB - In this paper we consider a transportation procurement auction consisting of shippers and carriers. Shippers offer time sensitive pickup and delivery jobs and carriers bid on these jobs. We focus on revenue maximizing strategies for the shippers in sequential auctions. For this purpose we propose two strategies, namely delaying and breaking commitments. The idea of delaying commitments is that a shipper will not agree with the best bid whenever it is above a certain reserve price. The idea of breaking commitments is that the shipper allows the carriers to break commitments against certain penalties. We evaluate the benefits of both strategies with simulation. In addition, we provide insight into the distribution of the lowest bid which is estimated by the shippers.

KW - Leveled commitment

KW - Freight transportation

KW - METIS-256656

KW - Auctions

KW - IR-79338

KW - Electronic markets

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DO - 10.1016/j.trc.2008.03.001

M3 - Article

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EP - 223

JO - Transportation research. Part C: Emerging technologies

JF - Transportation research. Part C: Emerging technologies

IS - 2

ER -

Dynamic threshold policy for delaying and breaking commitments in transportation auctions

Abstract

Keywords

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