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Internal Telephone Billing Rates—A Novel Application of Non-Atomic Game Theory

Author

Listed:
  • Louis J. Billera

    (Cornell University, Ithaca, New York)

  • David C. Heath

    (Cornell University, Ithaca, New York)

  • Joseph Raanan

    (Cornell University, Ithaca, New York)

Abstract

We consider the problem of determining rates for a situation in which services are purchased in bulk but have to be paid for by a large number of small users. The desired rates must be “fair” and they must cover all costs. The problem is formulated as a non-atomic game and solved by using the value of the game. In addition to the general problem, we present a detailed actual case, together with computational methods and results.

Suggested Citation

  • Louis J. Billera & David C. Heath & Joseph Raanan, 1978. "Internal Telephone Billing Rates—A Novel Application of Non-Atomic Game Theory," Operations Research, INFORMS, vol. 26(6), pages 956-965, December.
    • Handle: RePEc:inm:oropre:v:26:y:1978:i:6:p:956-965
    DOI: 10.1287/opre.26.6.956
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    Cited by:

    1. Behzad Hezarkhani & Greys Sošić, 2019. "Who’s Afraid of Strategic Behavior? Mechanisms for Group Purchasing," Production and Operations Management, Production and Operations Management Society, vol. 28(4), pages 933-954, April.
    2. Eric Bahel & Christian Trudeau, 2018. "Consistency requirements and pattern methods in cost sharing problems with technological cooperation," International Journal of Game Theory, Springer;Game Theory Society, vol. 47(3), pages 737-765, September.
    3. Banez-Chicharro, Fernando & Olmos, Luis & Ramos, Andres & Latorre, Jesus M., 2017. "Beneficiaries of transmission expansion projects of an expansion plan: An Aumann-Shapley approach," Applied Energy, Elsevier, vol. 195(C), pages 382-401.
    4. Stefan Engevall & Maud Göthe-Lundgren & Peter Värbrand, 2004. "The Heterogeneous Vehicle-Routing Game," Transportation Science, INFORMS, vol. 38(1), pages 71-85, February.
    5. Karl Michael Ortmann, 2016. "Fair allocation of capital growth," Operational Research, Springer, vol. 16(2), pages 181-196, July.
    6. Tijs, S.H. & Brânzei, R., 2004. "Cases in Cooperation and Cutting the Cake," Other publications TiSEM f9573808-10b5-4a9e-a835-2, Tilburg University, School of Economics and Management.
    7. Pierru, Axel, 2007. "Allocating the CO2 emissions of an oil refinery with Aumann-Shapley prices," Energy Economics, Elsevier, vol. 29(3), pages 563-577, May.
    8. Pham, Ngoc Anh, 2019. "Lorenz comparison between Increasing serial and Shapley value cost-sharing rules," Economics Letters, Elsevier, vol. 179(C), pages 49-52.
    9. Hiller, Tobias, 2017. "Quantitative overeducation and cooperative game theory," Economics Letters, Elsevier, vol. 152(C), pages 36-40.

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