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

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 e...

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Bibliographic Details
Published in:Interfaces (Providence) 2002-09, Vol.32 (5), p.4-12
Main Authors: Ledyard, John O, Olson, Mark, Porter, David, Swanson, Joseph A, Torma, David P
Format: Article
Language:English
Subjects:
Acquisition costs
Auctions
Bidding
Bids
Business
Business structures
Business studies
Cost control
Cost savings
Costs
Decision making
Economics
Experimental economics
Games
Games/group decisions: bidding/auctions
Logistics
Operations research
Procurement
Retail stores
Studies
Transportation services
Transportation: costs
Trucking
Trucking industry
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Summary: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.
ISSN:0092-2102
2644-0865
1526-551X
2644-0873
DOI:10.1287/inte.32.5.4.30