A budget-balanced and strategy-proof auction for multi-passenger ridesharing
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Ridesharing and ridesourcing services have become widespread, and properly pricing rides is a crucial problem for these services. We propose and analyze a budget-balanced and strategy-proof mechanism, the Weighted Minimum Surplus (WMS) auction, for the dynamic ridesharing problem with multiple passengers per ride. We also propose and analyze a budget-balanced version of the well-known VCG mechanism, the VCG_s. Under the assumption of downward closed alternatives, we obtain a lower bound for the surplus welfare and surplus profit of the WMS. Finally, we present an exact algorithm based on integer linear programming to solve these auctions. Encouraging experimental results of profit and welfare were obtained for both the WMS auction and the VCG_s.
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