Highlights The very nature of rail capacity makes its selling impossible through basic auction. Rail capacity needs to be sold through combinatorial auctions (CA). CA create an information burden incompatible with the reality of the industry. The railway timetable cannot be exclusively drawn by market mechanisms. This has strong consequences on the possible deregulation process.
Abstract Rail capacity is currently administratively allocated in Europe, whereas the economic literature has often contemplated the opportunity of introducing market mechanisms, auctions in particular, into this industry. This article tries to fill the gap between practice and theory. It first describes the properties of rail capacity (rigidity and non-homogeneity) and shows that because of its very nature, this capacity must be allocated through combinatorial auctions. As identified by the economic literature, using combinatorial auctions introduces a lot of complexity (winner determination and information burden) into the allocation process. To deal with this complexity, some form of centralized planning is necessary to design the right market mechanisms and to allocate capacity. This could have strong consequences on the current deregulation process.
Use of combinatorial auctions in the railway industry: Can the “invisible hand” draw the railway timetable?
Transportation Research Part A: Policy and Practice ; 67 ; 175-187
2014-07-08
13 pages
Aufsatz (Zeitschrift)
Elektronische Ressource
Englisch
[Eastern Counties Railway timetable]
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