Truthful multi-unit double auction with transaction costs and sellers’ changing marginal costs
Jiantao Guo,
Juliang Zhang and
T.C.E. Cheng
International Journal of Production Economics, 2024, vol. 278, issue C
Abstract:
It is well-known that lots of sellers offer discounts for large orders because of decreasing marginal costs and large productive capacities. Then some procurement platforms provide ways for small buyers to cooperate with their procurements and get discounts from these sellers. Moreover, these transactions will incur pair-related transaction costs. Generally, buyers values and sellers’ costs are private information. Then a critical problem faced by the platforms is to induce the buyers (sellers) to reveal their values (costs) truthfully and to match the supplies and demands efficiently. To solve this problem, we design a multi-unit double auction mechanism based on the padding method where the buyers bid their values and the sellers submit their marginal costs of different quantities, and the platform selects the winners, allocates the transactions, and sets the transaction prices for both sides. We show that the mechanism is budget-balanced, individually rational, incentive-compatible, and asymptotically efficient. For the special case with zero transaction costs, we further simplify the mechanism and get some new findings. We further conduct numerical studies to compare our mechanism with four commonly used mechanisms to demonstrate its advantages and examine the impacts of some parameters on the performance of our mechanism. Finally, we consider the cases with general marginal cost structure as well as private quantity information, respectively.
Keywords: Procurement mechanism; Double auction; Platform economy; Changing marginal cost; Transaction cost (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0925527324002871
Full text for ScienceDirect subscribers only
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:278:y:2024:i:c:s0925527324002871
DOI: 10.1016/j.ijpe.2024.109430
Access Statistics for this article
International Journal of Production Economics is currently edited by Stefan Minner
More articles in International Journal of Production Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().