Efficient Multi-Attribute Multi-Unit Auctions for B2B E-Commerce Logistics
Production and Operations Management · 2017 · Volume 26 · Issue 2
Abstract
This study is the first proposing allocatively efficient multi-attribute auctions for the procurement of multiple items. In theB2B e-commerce logistics problem(ELP), the e-commerce platform is the shipper generating a large number of online orders between product sellers and buyers, and third-party logistics (3PL) providers are carriers that can deliver these online orders. This study focuses on theELP with multiple attributes(ELP-MA), which is generally the problem of matching the shipper's online orders and 3PL providers given that price and other attributes are jointly evaluated. We develop a one-sided Vickrey–Clarke–Groves (O-VCG) auction for the ELP-MA. The O-VCG auction leads to incentive compatibility (on the sell side), allocative efficiency, budget balance, and individual rationality. We next introduce the concept of universally unsatisfied set to construct a primal-dual algorithm, also called the primal-dual Vickrey (PDV) auction. We prove that the O-VCG auction can be viewed as a single-attribute multi-unit forward Vickrey (SA-MFV) auction. Both PDV and SA-MFV auctions realize VCG payments and truthful bidding for general valuations. This result reveals the underlying link not only between single-attribute and multi-attribute auctions, but between static and dynamic auctions in a multi-attribute setting.
Keywords
E-commerce logistics problem (ELP), mechanism design, multi-attribute auctions, primal-dual algorithm, allocative efficiency
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