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Pricing traffic in a spanning network

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  • Moulin, Hervé

Abstract

Users need to connect a pair of target nodes in the network. They share the fixed connection costs of the edge. The system manager elicits target pairs from users, builds the cheapest forest meeting all demands, and choose a cost sharing rule satisfying:

Suggested Citation

  • Moulin, Hervé, 2014. "Pricing traffic in a spanning network," Games and Economic Behavior, Elsevier, vol. 86(C), pages 475-490.
    • Handle: RePEc:eee:gamebe:v:86:y:2014:i:c:p:475-490
    DOI: 10.1016/j.geb.2013.06.002
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    References listed on IDEAS

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    1. Hervé Moulin & Scott Shenker, 2001. "Strategyproof sharing of submodular costs:budget balance versus efficiency," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 18(3), pages 511-533.
    2. Hervé Moulin, 2007. "On Scheduling Fees to Prevent Merging, Splitting, and Transferring of Jobs," Mathematics of Operations Research, INFORMS, vol. 32(2), pages 266-283, May.
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    6. Feltkamp, V. & Tijs, S.H. & Muto, S., 1994. "On the irreducible core and the equal remaining obligations rule of minimum cost spanning extension problems," Other publications TiSEM 56ea8c64-a05f-4b3f-ab61-9, Tilburg University, School of Economics and Management.
    7. Feltkamp, V. & Tijs, S.H. & Muto, S., 1994. "On the irreducible core and the equal remaining obligations rule of minimum cost spanning extension problems," Discussion Paper 1994-106, Tilburg University, Center for Economic Research.
    8. Dong, Baomin & Guo, Guixia & Wang, Yuntong, 2012. "Highway toll pricing," European Journal of Operational Research, Elsevier, vol. 220(3), pages 744-751.
    9. Bogomolnaia, Anna & Moulin, Hervé, 2010. "Sharing a minimal cost spanning tree: Beyond the Folk solution," Games and Economic Behavior, Elsevier, vol. 69(2), pages 238-248, July.
    10. Bergantinos, Gustavo & Vidal-Puga, Juan J., 2007. "A fair rule in minimum cost spanning tree problems," Journal of Economic Theory, Elsevier, vol. 137(1), pages 326-352, November.
    11. Dutta, Bhaskar & Kar, Anirban, 2004. "Cost monotonicity, consistency and minimum cost spanning tree games," Games and Economic Behavior, Elsevier, vol. 48(2), pages 223-248, August.
    12. Sprumont, Yves, 1990. "Population monotonic allocation schemes for cooperative games with transferable utility," Games and Economic Behavior, Elsevier, vol. 2(4), pages 378-394, December.
    13. Feltkamp, V. & Tijs, S.H. & Muto, S., 1994. "Minimum cost spanning extension problems : The proportional rule and the decentralized rule," Other publications TiSEM 2c6cd46b-7e72-4262-a479-3, Tilburg University, School of Economics and Management.
    14. Daniel Granot & Michael Maschler, 1998. "Spanning network games," International Journal of Game Theory, Springer;Game Theory Society, vol. 27(4), pages 467-500.
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    16. Anna Bogomolnaia & Ron Holzman & Hervé Moulin, 2010. "Sharing the Cost of a Capacity Network," Mathematics of Operations Research, INFORMS, vol. 35(1), pages 173-192, February.
    17. Martin Hoefer, 2013. "Strategic cooperation in cost sharing games," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(1), pages 29-53, February.
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    Citations

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    Cited by:

    1. Jens Leth Hougaard & Mich Tvede, 2020. "Implementation of Optimal Connection Networks," IFRO Working Paper 2020/06, University of Copenhagen, Department of Food and Resource Economics.
    2. G. Bergantiños & J. Vidal-Puga, 2020. "One-way and two-way cost allocation in hub network problems," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 42(1), pages 199-234, March.
    3. Hougaard, Jens Leth & Tvede, Mich, 2015. "Minimum cost connection networks: Truth-telling and implementation," Journal of Economic Theory, Elsevier, vol. 157(C), pages 76-99.
    4. Jens Leth Hougaard & Mich Tvede, 2020. "Trouble Comes in Threes: Core stability in Minimum Cost Connection Networks," IFRO Working Paper 2020/07, University of Copenhagen, Department of Food and Resource Economics.
    5. Han, Lining & Juarez, Ruben, 2018. "Free intermediation in resource transmission," Games and Economic Behavior, Elsevier, vol. 111(C), pages 75-84.
    6. Hougaard, Jens Leth & Tvede, Mich, 2022. "Trouble comes in threes: Core stability in minimum cost connection networks," European Journal of Operational Research, Elsevier, vol. 297(1), pages 319-324.
    7. María Gómez-Rúa & Juan Vidal-Puga, 2017. "A monotonic and merge-proof rule in minimum cost spanning tree situations," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 63(3), pages 813-826, March.

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    More about this item

    Keywords

    Connection game; Core stability; Routing-proofness; Minimal cost spanning tree or forest;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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