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A Probabilistic Approach To Joint Cost Allocation in Public Projects

Author

Listed:
  • John G. Hof

    (USDA Forest Service)

  • Doug Rideout

    (Colorado State University)

Abstract

It is well known that joint cost allocations should not be used in making output decisions, but they might be required for budgeting or accounting purposes. This article develops approaches to joint cost allocation that minimize the chance of disturbing a correctly determined output set when cost information is not known with certainty. The approaches developed are shown in a case example to have the potential to substantially decrease the chance of cost allocations motivating output distortions, relative to extant methods.

Suggested Citation

  • John G. Hof & Doug Rideout, 1993. "A Probabilistic Approach To Joint Cost Allocation in Public Projects," Public Finance Review, , vol. 21(4), pages 399-414, October.
    • Handle: RePEc:sae:pubfin:v:21:y:1993:i:4:p:399-414
    DOI: 10.1177/109114219302100403
    as

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    References listed on IDEAS

    as
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    3. SCHMEIDLER, David, 1969. "The nucleolus of a characteristic function game," LIDAM Reprints CORE 44, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    5. Schotter, Andrew & Schwodiauer, Gerhard, 1980. "Economics and Game Theory: A Survey," Working Papers 80-06, C.V. Starr Center for Applied Economics, New York University.
    Full references (including those not matched with items on IDEAS)

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