Applying revenue management to agent-based transportation planning

We consider a multi-company, less-than-truckload, dynamic VRP based on the concept of multi-agent systems. We focus on the intelligence of one vehicle agent and especially on its bidding strategy. We address the problem how to price loads that are offered in real-time such that available capacity is used in the most profitable way taking into account possible future revenues. We develop methods to price loads dynamically based on revenue management concepts.\ud We consider a one leg problem, i.e., a vehicle travels from i to j and can wait at most τ time units in which it can get additional loads from i to j. We develop a DP to price loads given a certain amount of remaining capacity and an expected number of auctions in the time-to-go. Because a DP might be impractical if parameters change frequently and bids has to be determined in real-time, we derived two approximations to speed up calculations. The performance of these approximations are compared with the performance of the DP. Besides we introduce a new measure to calculate the average vehicle utilisation in consolidated shipments. This measure can be calculated based on a limited amount of data and gives an indication of the efficiency of schedules and the performance of vehicles

Look-ahead strategies for dynamic pickup and delivery problems

In this paper we consider a dynamic full truckload pickup and delivery problem with time-windows. Jobs arrive over time and are offered in a second-price auction. Individual vehicles bid on these jobs and maintain a schedule of the jobs they have won. We propose a pricing and scheduling strategy based on dynamic programming where not only the direct costs of a job insertion are taken into account, but also the impact on future opportunities. Simulation is used to evaluate the benefits of pricing opportunities compared to simple pricing strategies in various market settings. Numerical results show that the proposed approach provides high quality solutions, in terms of profits, capacity utilization, and delivery reliability

Rationality and Self-Interest in Peer to Peer Networks

Much of the existing work in peer to peer networking assumes that users will follow prescribed protocols without deviation. This assumption ignores the userr's ability to modify the behavior of an algorithm for self-interested reasons. We advocate a different model in which peer to peer users are expected to be rational and self-interested. This model is found in the emergent fields of Algorithmic Mechanism Design (AMD) and Distributed Algorithmic Mechanism Design (DAMD), both of which introduce game-theoretic ideas into a computational system. We, as designers, must create systems (peer to peer search, routing, distributed auctions, resource allocation, etc.) that allow nodes to behave rationally while still achieving good overall system outcomes. This paper has three goals. The first is to convince the reader that rationality is a real issue in peer to peer networks. The second is to introduce mechanism design as a tool that can be used when designing networks with rational nodes. The third is to describe three open problems that are relevant in the peer to peer setting but are unsolved in existing AMD/DAMD work. In particular, we consider problems that arise when a networking infrastructure contains rational agents.Engineering and Applied Science

Dealing With Misbehavior In Distributed Systems: A Game-Theoretic Approach

Most distributed systems comprise autonomous entities interacting with each other to achieve their objectives. These entities behave selfishly when making decisions. This behavior may result in strategical manipulation of the protocols thus jeopardizing the system wide goals. Micro-economics and game theory provides suitable tools to model such interactions. We use game theory to model and study three specific problems in distributed systems. We study the problem of sharing the cost of multicast transmissions and develop mechanisms to prevent cheating in such settings. We study the problem of antisocial behavior in a scheduling mechanism based on the second price sealed bid auction. We also build models using extensive form games to analyze the interactions of the attackers and the defender in a security game involving honeypots. Multicast cost sharing is an important problem and very few distributed strategyproof mechanisms exist to calculate the costs shares of the users. These mechanisms are susceptible to manipulation by rational nodes. We propose a faithful mechanism which uses digital signatures and auditing to catch and punish the cheating nodes. Such mechanism will incur some overhead. We deployed the proposed and existing mechanisms on planet-lab to experimentally analyze the overhead and other relevant economic properties of the proposed and existing mechanisms. In a second price sealed bid auction, even though the bids are sealed, an agent can infer the private values of the winning bidders, if the auction is repeated for related items. We study this problem from the perspective of a scheduling mechanism and develop an antisocial strategy which can be used by an agent to inflict losses on the other agents. In a security system attackers and defender(s) interact with each other. Examples of such systems are the honeynets which are used to map the activities of the attackers to gain valuable insight about their behavior. The attackers want to evade the honeypots while the defenders want them to attack the honeypots. These interesting interactions form the basis of our research where we develop a model used to analyze the interactions of an attacker and a honeynet system

Using Reputation Information on Internet-of-Services Markets

The paper identifies trusting problems between autonomousservices in the Internet-of-Services (IoS). This scenario visiondescribes a general computational paradigm, which allowscompanies to procure computational resources externally.The arising conflicting interests between providersand consumers lead to strategic behaviour of single services.Usually trust and reputation models are proposed to set incentivesfor acting honestly. But when using Double Auctionsto match buyers and sellers, these trust and reputationmodels fail to close this “trusting gap”. This paper proposesa modified Double Auction protocol fulfilling the deductedrequirements. Simulation experiments show that the usageof this modified protocol leads to increased trustworthinessfor the participants

Emergent Properties of a Market-based Digital Library with Strategic Agents

The University of Michigan Digital Library (UMDL) is designed as an open system that allows third parties to build and integrate their own profit-seeking agents into the marketplace of information goods and services. The profit-seeking behavior of agents, however, risks inefficient allocation of goods and services, as agents take strategic stances that might backfire. While it would be good if we could impose mechanisms to remove incentives for strategic reasoning, this is not possible in the UMDL. Therefore, our approach has instead been to study whether encouraging the other extreme—making strategic reasoning ubiquitous—provides an answer.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/43993/1/10458_2004_Article_251209.pd

Discrete Strategies in Keyword Auctions and Their Inefficiency for Locally Aware Bidders

We study formally discrete bidding strategies for the game induced by the Generalized Second Price keyword auction mechanism. Such strategies have seen experimental evaluation in the recent literature as parts of iterative best response procedures, which have been shown not to converge. We give a detailed definition of iterative best response under these strategies and, under appropriate discretization of the players' strategy spaces we find that the discretized configurations space {\em contains} socially optimal pure Nash equilibria. We cast the strategies under a new light, by studying their performance for bidders that act based on local information; we prove bounds for the worst-case ratio of the social welfare of locally stable configurations, relative to the socially optimum welfare