A novel mechanism for private parking space sharing: The auction with scale control

There can be many vacant private parking spaces near locations of excess parking demand. How can we provide the right incentives to potential suppliers and demanders so that they are shared in the market? We consider a parking-sharing platform in which each agent supplies a parking space and needs another one. We propose a novel parking-sharing mechanism that amends the well-known Vickrey-Clarke-Groves auction with the notion of scale control, which ex-ante constrains the number of agents who are offered a parking space by the platform. We show that such a mechanism is incentive compatible and individually rational. We illustrate that it can easily achieve budget balance with a proper choice of scale. We also extend our auction to include only suppliers and only demanders in addition to the agents who are simultaneously suppliers and demanders.