Combinatorial versus sequential auctions to allocate PPP highway projects

Mochon, Pablo; Mochon Saez, Maria Asuncion; Sáez Achaerandio, Yago

Publication:
Combinatorial versus sequential auctions to allocate PPP highway projects

dc.contributor.author	Mochon, Pablo
dc.contributor.author	Mochon Saez, Maria Asuncion
dc.contributor.author	Sáez Achaerandio, Yago
dc.date.accessioned	2023-11-09T11:53:10Z
dc.date.available	2023-11-09T11:53:10Z
dc.date.issued	2022-03-01
dc.description.abstract	This article models a procurement process for allocating multiple related public-private partnership (PPP) highway projects. Traditionally, public infrastructure procurement processes have used a sequential allocation mechanism, despite the potential benefits of allocating all projects at once. The main contribution of this research is to address the question whether these projects should be auctioned individually, in sequential auctions, or at the same time, in a combinatorial auction. Our goal is to understand the impact of the allocation process in terms of efficiency and social welfare. In sequential auctions, bidders submit their offers for each project independently. However, in combinatorial auctions, contractors have the ability to bid for their preferred packages (combinations of projects), reflecting synergies or entry costs, if any, in their valuations. We have compared the impact in terms of efficient allocation and social welfare of both mechanisms in order to help policymakers to take future decisions when facing these processes. The methodology used to address these core questions in the multidisciplinary environment described is based on social simulations, which involves conducting analysis by means of computational simulations. For this work we have created a sophisticated valuation model adapted to the public infrastructure sector and we have developed a simulator which includes multiple types of bidders, projects and several scenarios. The experimental setup is based on the second wave of the Colombian 4G program, a case involving the allocation of 9 highway construction projects across the country. We have also included references to multiple examples of real markets in which these mechanisms could be implemented. Therefore, this research provides a valuable reference for policymakers chasing to enhance market design that could be applied in many real-world scenarios. The results reveal that the combinatorial mechanism improves the process in terms of optimal allocation and efficiency, yielding significant savings for all parties.	en
dc.identifier.bibliographicCitation	Mochon, P., Mochon, A., Saez, Y. (2022). Combinatorial versus sequential auctions to allocate PPP highway projects, Transport Policy 117, 23-39. http://dx.doi.org/10.1016/j.tranpol.2021.12.015	en
dc.identifier.doi	http://dx.doi.org/10.1016/j.tranpol.2021.12.015
dc.identifier.issn	0967-070X
dc.identifier.publicationfirstpage	23
dc.identifier.publicationlastpage	39
dc.identifier.publicationtitle	Transport Policy	en
dc.identifier.publicationvolume	117
dc.identifier.uri	https://hdl.handle.net/10016/38806
dc.identifier.uxxi	AR/0000032869
dc.language.iso	eng
dc.publisher	Elservier
dc.rights	© 2022 The Authors.	en
dc.rights	Atribución 3.0 España
dc.rights.accessRights	open access	en
dc.rights.uri	http://creativecommons.org/licenses/by/3.0/es/
dc.subject.eciencia	Informática	es
dc.subject.other	Public-Privarte Partnership (PPP) Projects	en
dc.subject.other	sequential auction	en
dc.subject.other	combinatorial auction	en
dc.subject.other	procurement process	en
dc.subject.other	highway sector	en
dc.title	Combinatorial versus sequential auctions to allocate PPP highway projects	en
dc.type	research article	*
dc.type.hasVersion	VoR	*
dspace.entity.type	Publication