An iterative combinatorial auction design for fractional ownership of autonomous vehicles

Abstract

This study designs a new market for fractional ownership of autonomous vehicles (AVs), in which an AV is co‐leased by a group of individuals. We present a practical iterative auction based on the combinatorial clock auction to match the interested customers together and determine their payments. In designing such an auction, we consider continuous‐time items (time slots) that are defined by bidders and naturally exploit driverless mobility of AVs to form co‐leasing groups. To relieve the computational burdens of both bidders and the auctioneer, we devise user agents who generate packages and bid on behalf of bidders. Through numerical experiments using the California 2010–2012 travel survey, we test the performance of the auction design. We also compare various bidding strategies and study the effect of activity rules on the bidders' payoffs. We find that the designed activity rules successfully remove the strategic behavior of bidders. We also find that core‐selecting payment rule brings the largest revenue to the auctioneer in most cases.

Solving the winner determination problem in combinatorial auctions for fractional ownership of autonomous vehicles

“…The formulations and the solution approaches introduced in this paper can be used in developing various practical mechanisms, including iterative auctions with different pricing rules, as in Bogyrbayeva et al. (2020), for example.…”

“…For a more detailed description and comparison of the different payment rules for the combinatorial auction for fractional ownership of AVs, readers are referred to Bogyrbayeva et al. (2020).…”

“…While designing practical auction mechanisms and payment rules are beyond the scope of this study, the formulations and the solution approaches introduced in Sections 4 and 5 can be used in various practical mechanisms, including iterative auctions with different pricing rules, as in Bogyrbayeva et al. (2020).…”

Editorial to the Special Issue on Transportation and Logistics with Autonomous Technologies

“…(2021) and Bogyrbayeva et al. (2021). Under fractional ownership, two or more individuals can share the ownership or the cost of leasing a car, provided that their needs and schedules are correctly matched and coordinated.…”

“…(2021) and Bogyrbayeva et al. (2021) develop combinatorial auction approaches for fractional ownership of autonomous vehicles. In general, combinatorial auctions are a suitable mechanism to sell or procure items in packages instead of single items separately.…”