Allocation of fixed costs: characterization of the (dual) weighted Shapley value
AbstractThe weighted value was introduced by Shapley in 1953 as an asymmetric version of his value. Since then several axiomatizations have been proposed including one by Shapley in 1981 specifically addressed to cost allocation, a context in which weights appear naturally. It was at the occasion of a comment in which he only stated the axioms. The present paper offers a proof of Shapley's statement as well as an alternative set of axioms. It is shown that the value is the unique rule that allocates additional fixed costs fairly: only the players who are concerned contribute to the fixed cost and they contribute in proportion to their weights. A particular attention is given to the case where some players are assigned a zero weight.
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Bibliographic InfoPaper provided by Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg in its series Working Papers of BETA with number 2011-03.
Date of creation: 2011
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cost allocation; Shapley value; fixed cost.;
Find related papers by JEL classification:
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- D46 - Microeconomics - - Market Structure and Pricing - - - Value Theory
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