A reverse Vickrey auction for physical internet (PI) enabled parking management systems

Abstract

In this paper, two types of parking spaces, namely public and private parking spaces, are technically allocated to the drivers who may require a long or short time slot. Dynamic allocation and pricing process increase the complexity of evaluating the performance. We design a Physical Internet (PI) enabled parking management system to establish parking networks and collect real-time information for management and evaluation. Then, we propose a truthful, reverse Vickrey auction to allocate and price parking spaces in a static setting. We further incorporate the static auction mechanism into a continuous-time Markov Chain model and analyze the effects of the key factors (e.g., dynamic arrival rate and abandonment rate) in a dynamic setting. Our experimental results show that the expected price of the reverse Vickrey auction is lower than the market price. The expected profit is increasing in the arrival rate of parking spaces in the system. Finally, we numerically examine the benefits of parking space owners, drivers and the system, and highlight the associated managerial implications.