Aumann-Shapley Pricing: A Reconsideration of the Discrete Case
AbstractWe reconsider the following cost-sharing problem: agent i = 1, ...,n demands a quantity xi of good i; the corresponding total cost C(x1, ..., xn) must be shared among the n agents. The Aumann-Shapley prices (p1, ..., pn) are given by the Shapley value of the game where each unit of each good is regarded as a distinct player. The Aumann-Shapley cost-sharing method assigns the cost share pixi to agent i. When goods come in indivisible units, we show that this method is characterized by the two standard axioms of Additivity and Dummy, and the property of No Merging or Splitting: agents never find it profitable to split or merge their demands.
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Bibliographic InfoPaper provided by Centre interuniversitaire de recherche en économie quantitative, CIREQ in its series Cahiers de recherche with number 11-2004.
Length: 20 pages
Date of creation: 2004
Date of revision:
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cost sharing; Aumann-Shapley pricing; merging; splitting;
Other versions of this item:
- SPRUMONT, Yves, 2004. "Aumann-Shapley Pricing : A Reconsideration of the Discrete Case," Cahiers de recherche 2004-08, Universite de Montreal, Departement de sciences economiques.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-08-23 (All new papers)
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- Nouweland, C.G.A.M.. van den & Potters, J. & Tijs, S.H. & Zarzuelo, J., 1991. "Cores and related solution concepts for multi-choice games," Research Memorandum 478, Tilburg University, Faculty of Economics and Business Administration.
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