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Sharing cost of network among users with differentiated willingness to pay

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  • Panova, Elena

Abstract

We consider the problem of sharing the cost of a fixed tree-network among users with differentiated willingness to pay for the good supplied through the network. We find that the associated value-sharing problem is convex, hence, the core is large and we axiomatize a new, computationally simple core selection based on the idea of proportionality.

Suggested Citation

  • Panova, Elena, 2022. "Sharing cost of network among users with differentiated willingness to pay," TSE Working Papers 22-1356, Toulouse School of Economics (TSE), revised Mar 2023.
    • Handle: RePEc:tse:wpaper:127271
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    References listed on IDEAS

    as
    1. Moulin,Hervi, 1991. "Axioms of Cooperative Decision Making," Cambridge Books, Cambridge University Press, number 9780521424585.
    2. Gustavo Bergantiños & Juan Vidal-Puga, 2021. "A review of cooperative rules and their associated algorithms for minimum-cost spanning tree problems," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 12(1), pages 73-100, March.
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    4. S. H. Tijs & M. Koster & E. Molina & Y. Sprumont, 2002. "Sharing the cost of a network: core and core allocations," International Journal of Game Theory, Springer;Game Theory Society, vol. 30(4), pages 567-599.
    5. Aadland, David & Kolpin, Van, 1998. "Shared irrigation costs: An empirical and axiomatic analysis," Mathematical Social Sciences, Elsevier, vol. 35(2), pages 203-218, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    sharing network cost; core; proportional allocation;
    All these keywords.

    JEL classification:

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

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