Slot auction mechanism design based on budget balance

Abstract

In order to allocate airport slots efficiently and fairly, the auction theory was used to design slot auction mechanism, including allocation rules and payment rules. Firstly, aiming at the 1-1 slot trading, optimal allocation model was presented, under the guidance of allocation rules. Secondly, the payments of airlines and traffic flow management department were calculated, according to the vickrey payment rules. Thirdly, in order to meet the demand of budget balance, an improved model based on optimal allocation model was presented and several payment rules were proposed to solve this model. Finally, an example simulation was carried out. The results show that the new model can satisfy budget balance requirements. It is concluded that the optimal allocation results, pricing policy and payment rules have significant impact on the new model.