Auction-Based Permit Allocation and Sharing System (A-Pass) for Travel Demand Management, co-authored by Ruijie Li and Xiaobo Liu (both at Southwest Jiaotong University, China).

This is a follow up to another paper related to the mechanism design problems arising from ridesharing.  In this paper, we try to show the promise of integrating ridesharing with quantity-based travel demand management.  One of the main insights is that by auctioning out permits (e.g., to use a road facility), we can eliminate the deficits that are otherwise unavoidable in classical  Vickrey-Clark-Gloves mechanism.  The paper just came out in Transportation Science. You may read the abstract below and download a preprint here.

We propose a novel quantity-based demand management system aiming to promote ride-sharing. The system sells the permit to access a facility (conceptualized as a bottleneck) by auction but encourages commuters to share the permits with each other. The permit is classified according to access time and the commuters may be assigned one of the three roles: solo driver, ride-sharing driver, or rider. At the core of this auction-based permit allocation and sharing system (A-PASS) is a trilateral matching problem (TMP) that matches permits, drivers and riders. We formulate TMP as an integer program, and prove it can be reduced to an equivalent linear program. A pricing policy based on the classical Vickrey-Clark-Gloves (VCG) mechanism is proposed to determine the payment for each commuter. We prove, under the VCG policy, different commuters will pay exactly the same price as long as their role and access time are the same. We also show A-PASS can eliminate any deficit that may arise from the VCG policy by controlling the number of shared rides. Results of numerical experiment suggest A-PASS strongly promote rider-sharing. As ride-sharing increases, all stake holders are better off: the ride-sharing platform receives greater profits, the commuters enjoy higher utility, and the society benefits from more efficient utilization of infrastructure.