Dynamic threshold policy for delaying and breaking commitments in transportation auctions

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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 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. The benefits of both strategies are evaluated with simulation. In addition we provide insight in the distribution of the lowest bid, which is estimated by the shippers.
Original languageUndefined
Place of PublicationEnschede
PublisherUniversity of Twente, Research School for Operations Management and Logistics (BETA)
Number of pages29
ISBN (Print)9789038610603
Publication statusPublished - 2007

Publication series

NameBeta working papers
PublisherBeta Research School for Operations Management and Logistics, University of Twente
No.216

Keywords

  • IR-70232

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