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Allocation of costs to clean up a polluted river: an axiomatic approach

Author

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  • Wilson da C. Vieira

    (Federal University of Vicosa, Brazil)

Abstract

This paper proposes a method to share the costs of cleaning up a polluted river among the agents located along it. This method is based on a model of pollutant transport and the polluter pays principle. We provide an axiomatic characterization for this method and investigate its relationship with both the (weighted) Shapley value and the tau-value of the corresponding cost game generated from the problem. We show that the solution of the proposed method coincides with both the weighted Shapley value and the tau-value.

Suggested Citation

  • Wilson da C. Vieira, 2015. "Allocation of costs to clean up a polluted river: an axiomatic approach," Economics Bulletin, AccessEcon, vol. 35(2), pages 1216-1226.
    • Handle: RePEc:ebl:ecbull:eb-13-00603
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2015/Volume35/EB-15-V35-I2-P125.pdf
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    References listed on IDEAS

    as
    1. Haeringer, Guillaume, 2006. "A new weight scheme for the Shapley value," Mathematical Social Sciences, Elsevier, vol. 52(1), pages 88-98, July.
    2. Hung, Ming-Feng & Shaw, Daigee, 2005. "A trading-ratio system for trading water pollution discharge permits," Journal of Environmental Economics and Management, Elsevier, vol. 49(1), pages 83-102, January.
    3. Tijs, S.H., 1987. "An axiomatization of the ô-value," Other publications TiSEM 5536ac66-86f3-49fb-9e7d-2, Tilburg University, School of Economics and Management.
    4. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, December.
    5. Monderer, Dov & Samet, Dov & Shapley, Lloyd S, 1992. "Weighted Values and the Core," International Journal of Game Theory, Springer;Game Theory Society, vol. 21(1), pages 27-39.
    6. Tijs, Stef H., 1987. "An axiomatization of the [tau]-value," Mathematical Social Sciences, Elsevier, vol. 13(2), pages 177-181, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Water pollution; cost allocation; weighted Shapley value; tau-value.;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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