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Cooperative game-theoretic features of cost sharing in location-routing

Author

Listed:
  • Osicka, Ondrej

    (Dept. of Business and Management Science, Norwegian School of Economics)

  • Guajardo, Mario

    (Dept. of Business and Management Science, Norwegian School of Economics)

  • van Oost, Thibault

    (Louvain School of Management, Université catholique de Louvain)

Abstract

This article studies several variants of the location-routing problem using a cooperative game-theoretic framework. The authors derive characteristics in terms of subadditivity, convexity, and non-emptiness of the core. Moreover, for some of the game variants, it is shown that for facility opening costs substantially larger than the costs associated with routing, the core is always non-empty. The theoretical results are supported by numerical experiments aimed at illustrating the properties and deriving insights. Among others, it is observed that, while in general it is not possible to guarantee core allocations, in a huge majority of cases the core is non-empty.

Suggested Citation

  • Osicka, Ondrej & Guajardo, Mario & van Oost, Thibault, 2018. "Cooperative game-theoretic features of cost sharing in location-routing," Discussion Papers 2018/11, Norwegian School of Economics, Department of Business and Management Science.
    • Handle: RePEc:hhs:nhhfms:2018_011
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    File URL: http://hdl.handle.net/11250/2564531
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Collaborative logistics; Location-routing; Cooperative game theory; Cost allocation;
    All these keywords.

    JEL classification:

    • C00 - Mathematical and Quantitative Methods - - General - - - General
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games

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