An Operational Mechanism Design for Fleet Management Coordination in Humanitarian Operations

We study incentive alignment for the coordination of operations in humanitarian settings. Our research focuses on transportation, the second largest overhead cost to humanitarian organizations after personnel. Motivated by field research, we study the fleet size problem from a managerial perspective. In terms of transportation, an equity focused agent (the Humanitarian Program) has private information which affects the balance between equity and efficiency intended by the principal (the Humanitarian Organization Headquarter). The incentive alignment issue is complex because traditional instruments based on financial rewards and penalties are not considered to be viable options. This problem is further complicated by information asymmetry in the system due to the dispersed geographical location of the parties. We design a novel mechanism based on an operational lever to coordinate incentives in this setting. This study contributes to two streams of literature, humanitarian logistics, and incentives in operations management.