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Incitements for transportation collaboration by cost allocation

Author

Listed:
  • Joen Dahlberg

    (Linköping University)

  • Stefan Engevall

    (Linköping University)

  • Maud Göthe-Lundgren

    (Linköping University)

  • Kurt Jörnsten

    (Norwegian School of Economics and Business Administration)

  • Mikael Rönnqvist

    (Université Laval)

Abstract

In this paper, we focus on how cost allocation can be used as a means to create incentives for collaboration among companies, with the aim of reducing the total transportation cost. The collaboration is assumed to be preceded by a simultaneous invitation of the companies to collaborate. We make use of concepts from cooperative game theory, including the Shapley value, the Nucleolus and the EPM, and develop specific cost allocation mechanisms aiming to achieve large collaborations among many companies. The cost allocation mechanisms are tested on a case study that involves transportation planning activities. Although the case study is from a specific transportation sector, the findings in this paper can be adapted to collaborations in other types of transportation planning activities. Two of the cost allocation mechanisms ensure that any sequence of companies joining the collaboration represents a complete monotonic path, that is, any sequence of collaborating companies is such that the sequences of allocated costs are non-increasing for all companies.

Suggested Citation

  • Joen Dahlberg & Stefan Engevall & Maud Göthe-Lundgren & Kurt Jörnsten & Mikael Rönnqvist, 2019. "Incitements for transportation collaboration by cost allocation," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 27(4), pages 1009-1032, December.
    • Handle: RePEc:spr:cejnor:v:27:y:2019:i:4:d:10.1007_s10100-018-0530-2
    DOI: 10.1007/s10100-018-0530-2
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    References listed on IDEAS

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    1. Audy, Jean-François & D’Amours, Sophie & Rönnqvist, Mikael, 2012. "An empirical study on coalition formation and cost/savings allocation," International Journal of Production Economics, Elsevier, vol. 136(1), pages 13-27.
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    6. 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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