Sharing the Cost of Redundant Items
AbstractWe ask how to share the cost of finitely many public goods (items) among users with different needs: some smaller subsets of items are enough to serve the needs of each user, yet the cost of all items must be covered, even if this entails inefficiently paying for redundant items. Typical examples are network connectivity problems when an existing (possibly inefficient) network must be maintained. We axiomatize a family of simple usage indices, one for each agent and for each item, measuring the relative worth of this item across agents, and generating cost sharing rules additive in costs.
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Bibliographic InfoPaper provided by University of Copenhagen, Department of Food and Resource Economics in its series MSAP Working Paper Series with number 06_2012.
Length: 22 pages
Date of creation: Sep 2012
Date of revision:
Cost sharing; Redundant costs; Connection networks; Connectivity;
Find related papers by JEL classification:
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- D30 - Microeconomics - - Distribution - - - General
- D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
- M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-11 (All new papers)
- NEP-GTH-2012-11-11 (Game Theory)
- NEP-MIC-2012-11-11 (Microeconomics)
- NEP-NET-2012-11-11 (Network Economics)
- NEP-REG-2012-11-11 (Regulation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- S.C. Littlechild & G.F. Thompson, 1977. "Aircraft Landing Fees: A Game Theory Approach," Bell Journal of Economics, The RAND Corporation, vol. 8(1), pages 186-204, Spring.
- Yuntong Wang, 2013. "An Axiomatic Approach to the Airline Emission Fees Problem," Working Papers 1308, University of Windsor, Department of Economics.
- Debing Ni & Yuntong Wang, 2013. "Additive cost sharing on a tree," Working Papers 1307, University of Windsor, Department of Economics.
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