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The First Use of a Combined-Value Auction for Transportation Services

John Ledyard, Mark Olson (), David Porter, Joseph Swanson () and David P. Torma ()
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Mark Olson: Interdisciplinary Center for Economic Science, George Mason University, MSN 1B2, 4400 University Drive, Fairfax, Virginia 22030-4444
David P. Torma: Joseph Swanson and Company, 312 South Main Street, Racine, Wisconsin 53403–1029

Interfaces, 2002, vol. 32, issue 5, 4-12

Abstract: Combined-value auctions (CVAs) allow participants to make an offer of a single amount for a collection of items. These auctions provide value to both buyers and sellers of goods or services in a number of environments, but they have rarely been implemented, perhaps because of lack of knowledge and experience. Sears Logistics Services (SLS) is the first procurer of trucking services to use a CVA to reduce its costs. In 1993, it saved 13 percent over past procurement practices. Experimental economics played a crucial role in the development, sale, and use of the CVA.

Keywords: Economics; Games/group decisions: bidding/auctions; Transportation: costs (search for similar items in EconPapers)
Date: 2002
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Handle: RePEc:inm:orinte:v:32:y:2002:i:5:p:4-12