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Paths and consistency in additive cost sharing

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Author Info
Eric J. Friedman ()
Abstract

We provide a direct proof of a representation theorem for additive cost sharing methods as sums of path methods. Also, by directly considering the paths that generate some common additive cost sharing methods (Aumann-Shapley, Shapley Shubik, and Serial Cost) we show that they are consistent. These results follow directly from a simple sufficient condition for consistency: being generated by an associative path. We also introduce a new axiom, dummy consistency, which is quite mild. Using this, we also show that the Aumann-Shapley and Serial Cost methods are the unique (additive) consistent extension of their restriction on all two agent problems, while the Shapley-Shubik method has multiple consistent extensions but a unique anonymous scale invariant one. Copyright Springer-Verlag 2004

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File URL: http://hdl.handle.net/10.1007/s001820400173
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Article provided by Springer in its journal International Journal of Games Theory.

Volume (Year): 32 (2004)
Issue (Month): 4 (08)
Pages: 501-518
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Handle: RePEc:spr:jogath:v:32:y:2004:i:4:p:501-518

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  1. SPRUMONT, Yves, 2004. "Nearly Serial Sharing Methods," Cahiers de recherche 2004-14, Universite de Montreal, Departement de sciences economiques. [Downloadable!]
  2. Justin Leroux, 2006. "A discussion of the consistency axiom in cost-allocation problems," Cahiers de recherche 06-13, HEC Montréal, Institut d'économie appliquée. [Downloadable!]
  3. Thierry Marchant, 2008. "Scale invariance and similar invariance conditions for bankruptcy problems," Social Choice and Welfare, Springer, vol. 31(4), pages 693-707, December. [Downloadable!] (restricted)
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  4. Yves Sprumont, 2008. "Nearly serial sharing methods," International Journal of Game Theory, Springer, vol. 37(2), pages 155-184, June. [Downloadable!] (restricted)
  5. Maurice Koster, 2007. "The Moulin–Shenker rule," Social Choice and Welfare, Springer, vol. 29(2), pages 271-293, September. [Downloadable!] (restricted)
  6. SPRUMONT, Yves & MOULIN, Hervé, 2005. "Fair Allocation of Production Externalities: Recent Results," Cahiers de recherche 2005-22, Universite de Montreal, Departement de sciences economiques. [Downloadable!]
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