Truthful online bundle double auction mechanisms for a transport market with dynamic demands and supplies

Abstract

In this paper, we study the transaction mechanism design problem for a market where shippers and carriers dynamically arrive at and depart from an online freight platform to trade their transport services over a transport network. The agents are self-interested and their valuations, costs, and arrival and departure times are private information. We propose online double auction mechanisms to dynamically match the demands and supplies and set the transaction prices for three different cases. We first consider the case that each shipper wants to procure one unit of transport service on a lane and each carrier can supply multiple units of transport service on multiple lanes, and propose the Online Bundle Double Auction (OBDA) mechanism for it. We show that the mechanism is feasible, incentive-compatible, individually rational, and budget-balanced. Then we further consider two more general cases: the case where the shippers have multi-unit demand on one lane and the case where the shippers have multi-unit indivisible demand on multiple lanes. We show that the framework of the OBDA mechanism can still be applied to these cases by modifying some rules. We show that the two modified mechanisms still have good properties. Moreover, we conduct numerical studies to investigate the impacts of some parameters on these mechanisms’ performance.