A Testbed Experiment of a (Smart) Market Based, Student Transportation Policy : Non Convexities, Coordination, Non Existence

The paper develops a decentralized mechanism for allocations and pricing under economic conditions that traditionally dictate administrative policies as solutions. Because of complex coordination problems, thin markets, and non-convexities including zero marginal cost due to lumpy transportation capacities, classical theory holds that classical market organization cannot succeed. The mechanism is designed for a specific, complex application. It rests on an assignment model guided by a computational process that enforces rules and channels information feedback to participants. Special testbed experimental methods developed for the application produce high levels of efficiency under conditions that amplify anticipated field challenges