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An algorithm to compute the average-of-awards rule for claims problems with an application to the allocation of CO $$_2$$ 2 emissions

Author

Listed:
  • Miguel Ángel Mirás Calvo

    (Universidade de Vigo)

  • Iago Núñez Lugilde

    (CINBIO, Universidade de Vigo)

  • Carmen Quinteiro Sandomingo

    (Universidade de Vigo)

  • Estela Sánchez-Rodríguez

    (CINBIO, Universidade de Vigo)

Abstract

The set of awards vectors for a claims problem coincides with the core of the associated coalitional game. We analyze the structure of this set by defining for each group of claimants a, so called, utopia game, whose core comprises the most advantageous imputations available for the group. We show that, given a claims problem, the imputation set of the associated coalitional game can be partitioned by the cores of the utopia games. A rule selects for each claims problem a unique allocation from the set of awards vectors. The average-of-awards rule associates to each claims problem the geometric center of the corresponding set of awards vectors. Based on the decomposition of the imputation set, we obtain an interpretation of the average-of-awards rule as a point of fairness between stable and utopia imputations and provide a backward recurrence algorithm to compute it. To illustrate our analysis, we present an application to the distribution of CO $$_2$$ 2 emissions.

Suggested Citation

  • Miguel Ángel Mirás Calvo & Iago Núñez Lugilde & Carmen Quinteiro Sandomingo & Estela Sánchez-Rodríguez, 2024. "An algorithm to compute the average-of-awards rule for claims problems with an application to the allocation of CO $$_2$$ 2 emissions," Annals of Operations Research, Springer, vol. 336(3), pages 1435-1459, May.
    • Handle: RePEc:spr:annopr:v:336:y:2024:i:3:d:10.1007_s10479-023-05214-8
    DOI: 10.1007/s10479-023-05214-8
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