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A Combinatorial Auction Mechanism for Airport Time Slot Allocation
S. J. Rassenti, V. L. Smith and R. L. Bulfin
The Bell Journal of Economics
Vol. 13, No. 2 (Autumn, 1982), pp. 402-417
Published by: RAND Corporation
Stable URL: http://www.jstor.org/stable/3003463
Page Count: 16
You can always find the topics here!Topics: Airlines, Airports, Auctions, Primary markets, Secondary markets, Market prices, Prices, Demand, Economic costs, Commodities
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A sealed-bid combinatorial auction is developed for the allocation of airport time slots to competing airlines. This auction procedure permits airlines to submit various contingency bids for flight-compatible combinations of individual airport landing or take-off slots. An algorithm for solving the resulting set-packing problem yields an allocation of slots to packages that maximizes the system surplus as revealed by the set of package bids submitted. The algorithm determines individual (slot) resource prices which are used to price packages to the winning bidders at levels guaranteed to be no greater (and normally smaller) than the amounts bid. Laboratory experiments with cash motivated subjects are used to study the efficiency and demand revelation properties of the combinatorial auction in comparison with a proposed independent slot primary auction.
The Bell Journal of Economics © 1982 RAND Corporation