Tendering Universal Service Obligations in Liberalized Network Industries

In the past decades, several countries have introduced reverse auctions for allocating universal service or public mission subsidies in various industries. Examples include urban transport, air transport and telecommunications. Recently, such mechanisms have also been envisioned in liberalized postal markets. Issuing an invitation to tender for obligations in otherwise liberalized markets significantly differs from auctioning off a monopolistic provision of services or goods (competition for the market), as is e.g. the case with spectrum auctions in the telecommunications sector. We discuss the rationale for introducing such a regulatory regime as well as conceptual and practical issues concerning its implementation. It turns out that designing an efficient tender for universal service subsidies in liberalized markets is considerably more difficult than tendering e.g. a monopoly franchise. A first reason is that the cost assessment is more complex in the former case as future competitive market outcomes have to be anticipated; in the case with franchise bidding, at least the number of competitors is given by the tender itself. Hence, revenue effects caused by competitors are easier to calculate. Second, the threat of a winner’s moral hazard requires more detailed ex ante regulations. These raise the social cost of universal service provision. Compared to direct designation of universal services with ex post compensation, tendering causes a series of fundamental concerns and trade-offs that make the application of auctions less attractive than in other sectors.Procurement, Tendering, Reverse Auctions, Universal Service Obligation, Liberalization, Network Industries

Auctioning Bulk Mobile Messages

The search for enablers of continued growth of SMS traffic, as well asthe take-off of the more diversified MMS message contents, open up forenterprises the potential of bulk use of mobile messaging , instead ofessentially one-by-one use. In parallel, such enterprises or valueadded services needing mobile messaging in bulk - for spot use or foruse over a prescribed period of time - want to minimize totalacquisition costs, from a set of technically approved providers ofmessaging capacity.This leads naturally to the evaluation of auctioning for bulk SMS orMMS messaging capacity, with the intrinsic advantages therein such asreduction in acquisition costs, allocation efficiency, and optimality.The paper shows, with extensive results as evidence from simulationscarried out in the Rotterdam School of Management e-Auction room, howmulti-attribute reverse auctions perform for the enterprise-buyer, aswell as for the messaging capacity-sellers. We compare 1- and 5-roundauctions, to show the learning effect and the benefits thereof to thevarious parties. The sensitivity will be reported to changes in theenterprise's and the capacity providers utilities and prioritiesbetween message attributes (such as price, size, security, anddelivery delay). At the organizational level, the paper also considersalternate organizational deployment schemes and properties for anoff-line or spot bulk messaging capacity market, subject to technicaland regulatory constraints.MMS;EMS;Mobile commerce;SMS;multi-attribute auctions

Pay-per-click advertising: A literature review

Digital marketing is being widely employed to efficiently and effectively market products/services to achieve increased sales and generate higher revenues. It allows businesses to effectively communicate desired content to their consumers. Pay-per-click (PPC) is one such form of digital marketing. PPC is often acknowledged for the different advantages it offers, and at the same time, it is notably criticised for fraud and other issues associated with its use. The literature on this subject, although limited, has invested considerable efforts in unveiling the pros and cons of employing PPC as a marketing/advertising strategy. This paper reviews 50 publications on PPC advertising to synthesise their findings and arrive at a common ground for understanding the digital presence and impact of this form of marketing. Alongside discussing the findings, observed limitations and opportunities for future research have been identified and reported

From supply chains to demand networks. Agents in retailing: the electrical bazaar

A paradigm shift is taking place in logistics. The focus is changing from operational effectiveness to adaptation. Supply Chains will develop into networks that will adapt to consumer demand in almost real time. Time to market, capacity of adaptation and enrichment of customer experience seem to be the key elements of this new paradigm. In this environment emerging technologies like RFID (Radio Frequency ID), Intelligent Products and the Internet, are triggering a reconsideration of methods, procedures and goals. We present a Multiagent System framework specialized in retail that addresses these changes with the use of rational agents and takes advantages of the new market opportunities. Like in an old bazaar, agents able to learn, cooperate, take advantage of gossip and distinguish between collaborators and competitors, have the ability to adapt, learn and react to a changing environment better than any other structure. Keywords: Supply Chains, Distributed Artificial Intelligence, Multiagent System.Postprint (published version

Feasibility of Equity-driven Taxi Pricing Strategy based on Double Auction Mechanism in Bangkok Metropolitan Region, Thailand

Passenger rejection by taxi drivers impacts the travel behaviour in many cities and suburban areas, often leaving those potential customers in non-popular zones stranded without access to taxis. To overcome this problem, many practices have been implemented, such as penalties to drivers, bans, and new pricing strategies. This paper presents a double auction taxi fare scheme, which gives both passengers and taxi drivers to influence the price, coupled with a clustering method to discourage strategic service rejection in the case study of Bangkok Metropolitan Region, Thailand, which has detailed data availability and uneven taxi journey distributions. The double auction mechanism is tailored to 2019 taxi trips, service rejection complaints, and local travel behaviour to boost transportation equity. To benchmark the performance of the new double auction scheme, a bespoke agent-based model of the taxi service in Bangkok Metropolitan Region at different rejection rates of 0%-20% was created. On one hand, the current rejection behaviour was modelled, and on the other, the double auction pricing strategy was applied. The results indicate that the double auction strategy generates a spatially distributed accessibility and leads to a higher taxi assignment success rate by up to 30%. The double auction scheme increases pickups from locations that are 20-40 km from central Bangkok by 10-15%, despite being areas of low profit. Due to the changing taxi travel landscape and longer taxi journeys, the total air pollutant emissions from the taxis increase by 10% while decreasing local emissions within central areas of Bangkok by upto 40%. Using a 5 Baht average surcharge, the total revenue drops by 20%. The results show that an equity-driven pricing strategy as an implementation of transport policy would be beneficial.Comment: 21 pages, 10 figures, 1 table, as accepted at Transportation Research Board Conference 202

Competition in network industries

A wave of privatization is sweeping the globe, affecting about 100 countries and adding up to an average of more than $60 billion a year in business in the past decade. The challenge is to ensure that privatization yields clear benefits. Empirical studies suggest that ownership change by itself will often yield results, especially when it reduces government interference. But the regulation required in areas of natural monopoly can become overly intrusive and undermine progress. Real competition is required to generate sizable and lasting welfare improvements. But in infrastructure sectors, the introduction of competition is complicated by the existence of complex transport and communications networks. Debate about whether and how to introduce competition in network industries is sometimes heated. Certain questions recur: Will continuing regulation be needed? Whether and at what terms will private finance be forthcoming? The author argues that policymakers need to understand how competitive forces can be brought to bear in network industries. He explains the following: 1) common principles that are often lost in"technical"debates about specific sectors; 2) various methods for introducing competition in network industries; 3) competition for the market, and bidding for franchises; 4) options for competition for existing networks; 5) options for expanding competitive systems by decentralizing investment in new network capacity; 6) the option of allowing competition among multiple networks; and 7) the implications of these options for the sectors and for financing industry expansion. In case of doubt, he contends, policymakers should not restrict the entry of competitive firms in such networks. If they do, entry restrictions should be subject to an automatic test after a set period, and reviewed for costs and benefits.Economic Theory&Research,Decentralization,Markets and Market Access,Environmental Economics&Policies,Labor Policies,Education for the Knowledge Economy,Economic Theory&Research,Access to Markets,Markets and Market Access,Environmental Economics&Policies

Auctioning Bulk Mobile Messages

The search for enablers of continued growth of SMS traffic, as well as the take-off of the more diversified MMS message contents, open up for enterprises the potential of bulk use of mobile messaging , instead of essentially one-by-one use. In parallel, such enterprises or value added services needing mobile messaging in bulk - for spot use or for use over a prescribed period of time - want to minimize total acquisition costs, from a set of technically approved providers of messaging capacity. This leads naturally to the evaluation of auctioning for bulk SMS or MMS messaging capacity, with the intrinsic advantages therein such as reduction in acquisition costs, allocation efficiency, and optimality. The paper shows, with extensive results as evidence from simulations carried out in the Rotterdam School of Management e-Auction room, how multi-attribute reverse auctions perform for the enterprise-buyer, as well as for the messaging capacity-sellers. We compare 1- and 5-round auctions, to show the learning effect and the benefits thereof to the various parties. The sensitivity will be reported to changes in the enterprise's and the capacity providers utilities and priorities between message attributes (such as price, size, security, and delivery delay). At the organizational level, the paper also considers alternate organizational deployment schemes and properties for an off-line or spot bulk messaging capacity market, subject to technical and regulatory constraints

Internet Resource Management and Pricing

Originally conceived and funded as a research project, the Internet has grown into a commercial, global and integrated service network. This has changed the nature of traffic on the Internet with the increasing use of things like video conferencing and time critical transactions. These forms of Internet usage place high demands on bandwidth. Added to this is the fact that the number of users is increasing at a dramatic rate and shows no signs of slowing. This is leading to a \u27tragedy of the commons\u27 where endemic congestion will reduce the value of the Internet to everyone. It also implies the introduction of some form of quality of service (QoS) to differentiate time critical traffic from less time critical traffic. Pricing usage has been shown to be effective in controlling congestion by promoting more effective resource allocation. To provide the necessary QoS, there is an argument that simply increasing the available bandwidth will achieve this, while at the same time maintaining the simple model of the current Internet. However, there is also an argument that a more complex model may be needed that provides various levels of QoS with an associated pricing scheme to manage usage of these levels of QoS. A major part of the debate on this subject surrounds the trade-off between efficiency, economics and complexity that exists in introducing QoS and pricing to the Internet. This document discusses some of these issues, presents some of the current proposals for pricing Internet usage and finally compares the presented pricing proposals