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

  • Authors:
  • John O. Ledyard;Mark Olson;David Porter;Joseph A. Swanson;David P. Torma

  • Affiliations:
  • -;-;-;-;-

  • Venue:
  • Interfaces
  • Year:
  • 2002

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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.