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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Mechanism Design for Ridesharing
Dengji Zhao1 Dongmo Zhang2 Enrico Gerding1
Gopal Ramchurn1 Makoto Yokoo3 David Parkes4
Nick Jennings1
1University of Southampton, UK2University of Western Sydney, Australia
3Kyushu University, Japan4Harvard University, US
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Ridesharing Example
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Ridesharing Example
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Ridesharing Example
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Ridesharing Example
Questions:How to arrange thesharing?How much shouldthey pay/receive?
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
History
Began in the 1940s in NorthAmericaBeen promoted because of
fuel shortages, air pollution andtraffic congestion
Peaked in the US in 1970 with acommute mode share of 20.4%
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Public and Private Promotions
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
People are still NOT well motivated!
not going well...
Australia (Queensland) will end ridesharing lanesThe average car carries just 1.6 people
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
What are the obstacles?
Safety and PrivacyFlexibility and Reliability...
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
What are the obstacles?
Safety and PrivacyFlexibility and Reliability...Complicated join proceduresNo free market competition!
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
What we can do?
Use Mechanism Design to build ridesharing:Automated ride matchingAutomated (profitable) price setting
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
What we can do?
Use Mechanism Design to build ridesharing:Automated ride matchingAutomated (profitable) price setting
(A -> B, cost: 10)
Driver 1
Exisitng
Ridesharing
Services
Auction
Based
Ridesharing
post trips
(A -> B, cost: 15)
Rider 2search trips
3
ride arrangement
(A -> B, cost: 10)
Driver
(A -> B, cost: 15)
Rider
1
1
post trips
post trips
2
ride schedules
2
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
What we can do?
Use Mechanism Design to build ridesharing:Automated ride matchingAutomated (profitable) price setting
to answer...Questions:
How to arrange the sharing?How much should commuters pay/receive?
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Outline
1 The Model
2 Fixed-price Mechanisms
3 VCG with Reserve Prices
4 Balanced Trade Reduction
5 Conclusion
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Outline
1 The ModelAuction-based Ridesharing
2 Fixed-price Mechanisms
3 VCG with Reserve Prices
4 Balanced Trade Reduction
5 Conclusion
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Auction-based Ridesharing
System Overview
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Auction-based Ridesharing
System Overview
Input:Route map: a graph G = (L,E),
L: stopping points/locations,E : routes between stopping points,w(e): time required to travel via route e ∈ E .
Commuter i ’s private trip/type: θi = (ldi , lai , t
di , t
ai , ci ,qi)
ldi , lai ∈ L: departure and arrival locations,
tdi , t
ai : earliest departure and latest arrival time,
ci ∈ R+: travel cost to finish the trip,qi ∈ N: extra seats available on the trip.
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Auction-based Ridesharing
System Overview
Output:Allocation/Scheduling:
driver: drives and takes ridersrider: shares with driversunmatched: goes with the original travel preference
Payments:driver: receives moneyrider: pays moneyunmatched: no payment
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Auction-based Ridesharing
The Goal of the System
Properties of the output:Minimize the total travel costs (efficiency)Incentivize participation and against manipulations
commuters never receive negative utility (individualrationality)truthfully reporting their trip information is a dominantstrategy (truthfulness)
Deficit control (budget balance)The system owner should not lose too much money
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Auction-based Ridesharing
One Solution: Applying VCG Mechanism
One classical solution: VCG
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Auction-based Ridesharing
One Solution: Applying VCG Mechanism
Vickrey Auction (Second Price Auction)
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Auction-based Ridesharing
One Solution: Applying VCG Mechanism
Vickrey Auction (Second Price Auction)
Allocation: the agent with the highest valuation winsPayment : the harm of others caused by the winnerProperties: Efficient, Individual Rational, and Truthful.
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Auction-based Ridesharing
One Solution: Applying VCG Mechanism
Vickrey-Clarke-Groves (VCG) auction
Efficient (costs minimizing)Individually rational (agents never lose money)Truthful (truthfully reporting is the best)High deficit (m times of the costs saved!)
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Auction-based Ridesharing
One Solution: Applying VCG Mechanism
Vickrey-Clarke-Groves (VCG) auction
Efficient (costs minimizing)Individually rational (agents never lose money)Truthful (truthfully reporting is the best)High deficit (m times of the costs saved!)
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Auction-based Ridesharing
One Solution: Applying VCG Mechanism
Vickrey-Clarke-Groves (VCG) auction
Efficient (costs minimizing)Individually rational (agents never lose money)Truthful (truthfully reporting is the best)High deficit (m times of the costs saved!)
QuestionHow to control deficit?
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Auction-based Ridesharing
Our Solutions (Overview)
We propose...Fixed-price Mechanisms :
Flexible deficit control (outperforms VCG)Truthful and individually rationalVery inefficient
VCG with Reserve Prices :
Flexible deficit control (outperforms VCG)(Partially) truthful and individually rationalFlexible efficiency control
Balanced Trade Reduction :
Flexible deficit control (outperforms VCG)truthful and individually rationalFlexible efficiency control
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Outline
1 The Model
2 Fixed-price Mechanismsxfixed(p0,p1)
3 VCG with Reserve Prices
4 Balanced Trade Reduction
5 Conclusion
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
xfixed (p0, p1)
Fixed Payments xfixed(p0,p1)
Given predefined values p0 ≥ 0 (for riders) and p1 ≤ 0 (fordrivers), fixed payments are defined
Allocation independentAllocation dependent
location dependent (e.g. shortest path)detour dependentsharing dependent...
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
xfixed (p0, p1)
Dictatorship Mechanism
Serial Dictatorship Mechanism with fixed payments1 Predefine the set of (potential) drivers and riders2 Order potential drivers and riders3 Maximize drivers’ utility according to the order4 Each driver/rider gets the fixed payment
Propertiestruthful and individually rationalbetter deficit control than VCGvery inefficient
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
xfixed (p0, p1)
Problems of Non-dictatorship Mechanisms
Case I:fixedPay = 10both prefer drivingpotential problem fordeterministic mechanisms
Case II:fixedPay = 1both prefer ridingpotential problem for allmechanisms
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Outline
1 The Model
2 Fixed-price Mechanisms
3 VCG with Reserve PricesMVCG(r0, r1)
4 Balanced Trade Reduction
5 Conclusion
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
MVCG(r0, r1)
VCG with Two-Sided Reserve PricesMVCG(r0, r1)
Predefined reserve prices r0 ≥ 0 (for riders) and r1 ≤ 0 (fordrivers),
Note: r0 and r1 can be allocation dependent.
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
MVCG(r0, r1)
Properties ofMVCG(r0, r1)
MVCG(r0, r1) istruthful iff r0 ≥ −r1. Otherwise, the manipulationgain is bounded (max(−r1 − r0, δmax
i (−r1 − r0))).weakly budget balanced without detour.Otherwise, deficit is bounded (−ndδ
max r1 − nr r0).more efficient as r0 + r1 decreases.
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
MVCG(r0, r1)
A Common Feature of the Dictatorship and VCG withReserves
The truthfulness is satisfied ifeach commuter can only be allocated as one predefinedrole (driver or rider) or unmatched.
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Outline
1 The Model
2 Fixed-price Mechanisms
3 VCG with Reserve Prices
4 Balanced Trade ReductionMcAfee’s Trade ReductionBalanced Trade Reduction
5 Conclusion
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
McAfee’s Trade Reduction
McAfee’s Trade Reduction (1992)
McAfee’s reduction: increase VCG payments via reducingefficiency
94
98
113
90
85
79
53
121
82
91
112
82
69
37
120
125
sellers/
drivers
buyers/
riders
VCG payments:Riders: 90Drivers: −91
Deficit: 4McAfee’s payments:
Riders: 91Drivers: −90
No deficit!
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
McAfee’s Trade Reduction
McAfee’s Reduction is NOT Truthful in Ridesharing
McAfee’s trade reduction is NOT truthful in ridesharingbecause:
a commuter who can be allocated as either driver or ridermight manipulate/switch!
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Balanced Trade Reduction
Balanced Trade Reduction (BTR)
VCG payment for a buyer
vbi − xvcg
i ≥ vsi − x̂vcg
i
McAfee’s payment for a buyer
vbi − (xvcg
i + δ1) � vsi − (x̂vcg
i + δ2)
Balanced Trade Reduction payment for a buyer
vbi − (xvcg
i + δ) ≥ vsi − (x̂vcg
i + δ)
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Balanced Trade Reduction
Balanced Trade Reduction (BTR)
VCG payment for a buyer
vbi − xvcg
i ≥ vsi − x̂vcg
i
McAfee’s payment for a buyer
vbi − (xvcg
i + δ1) � vsi − (x̂vcg
i + δ2)
Balanced Trade Reduction payment for a buyer
vbi − (xvcg
i + δ) ≥ vsi − (x̂vcg
i + δ)
Properties of BTR:Truthful, Individual Rational, almost Efficient, but hasDeficit.
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Outline
1 The Model
2 Fixed-price Mechanisms
3 VCG with Reserve Prices
4 Balanced Trade Reduction
5 ConclusionDone and ToDo
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Done and ToDo
What is NEW?
The first comprehensive ridesharing model studied from apure game-theoretic point of view.Auction-based ridesharing system incentivizingparticipation.Flexible deficit control rather than completely removedeficit.
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The Model Fixed-price Mechanisms VCG with Reserve Prices Balanced Trade Reduction Conclusion
Done and ToDo
Future Work
Tradeoff between deficit and efficiency (theoretically orsimulations).The problem of finding optimal schedules iscomputationally hard (optimal in range).Allow agents to submit trips dynamically over time (onlinemechanism design).
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![The SIGSPATIAL Special · ing. Ridesharing can be either static or dynamic [9, 10]. Most ridesharing systems operating today belong to static ridesharing, which arrange the driver](https://static.documents.pub/doc/80x56/5ed37bb0847f87317f77be5b/the-sigspatial-special-ing-ridesharing-can-be-either-static-or-dynamic-9-10.jpg)
