340 / 2024-04-24 16:00:52

A meta-auction for on-demand transportation procurement

auction design, on-demand transportation

Cyber-Physical Internet (CPI) is a cutting-edge concept that merges physical systems with cyber technologies, facilitating seamless interaction between the physical and virtual realms. This innovative approach is revolutionizing the transportation industry by paving the way for a new era of logistics and transport networks. The introduction of CPI into the transport services procurement is prompting a reevaluation of fundamental aspects such as transport route planning, service mode selection, and real-time pricing. This paper delves into the application of auctions for transport service procurement within a CPI environment, aiming to establish a novel CPI-based transport service trading platform leveraging CPI technology. The platform integrates information from both supply and demand sides and devises a unique auction mechanism to enhance transparency and efficiency in transport services. The transport route allocation quandary is simplified into an auction model, where carriers truthfully submit unit route costs, and the winning carrier and pricing are determined using the single-unit Vickrey-Clark-Groves (VCG) method. To address scenarios with multiple carriers per network segment node, the paper proposes the multi-unit VCG auction method. Furthermore, the weighted affine VCG auction method is introduced, considering the weight of each network segment route. All three mechanisms are generalized VCG auctions, ensuring incentive compatibility, budget balance, allocation efficiency, and individual rationality. Case studies validate the effectiveness of the proposed methods, offering managerial insights based on key findings that are valuable for industry professionals and researchers in the CPI domain. This study underscores the transformative potential of CPI in revolutionizing transport service procurement auctions and underscores the advantages of amalgamating physical and cyber technologies in auction design.