Cost Sharing, Differential Games, and the Moulin-Shenker Rule
The Moulin-Shenker rule (Sprumont (1998)) is a nonlinear solution concept for solving heterogeneous cost sharing problems. The first part of the paper shows an axiomatic characterization of this solution using bounds on cost shares and consistency. The second part is devoted to differential games for heterogeneous production problems. It is shown for 2-player games that by an appropriate choice of the game dynamics there is essentially a unique Markov perfect Nash equilibrium. An axiomatic analysis follows for the appropriate game dynamics, which leads in turn to a strategic characterization of the Moulin-Shenker rule.
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- Moulin, Herve, 1995.
"Cost-Sharing under Increasing Returns: A Comparisonof Simple Mechanisms,"
95-19, Duke University, Department of Economics.
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- Eric Friedman & Moulin, Herve, 1995.
"Three Methods to Share Joint Costs or Surplus,"
95-38, Duke University, Department of Economics.
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Cahiers de recherche
9624, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
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- Moulin Herve & Shenker Scott, 1994. "Average Cost Pricing versus Serial Cost Sharing: An Axiomatic Comparison," Journal of Economic Theory, Elsevier, vol. 64(1), pages 178-201, October.
- Moulin, Herve & Shenker, Scott, 1992. "Serial Cost Sharing," Econometrica, Econometric Society, vol. 60(5), pages 1009-37, September.
- Moulin, Herve, 2002.
"Axiomatic cost and surplus sharing,"
Handbook of Social Choice and Welfare,
in: K. J. Arrow & A. K. Sen & K. Suzumura (ed.), Handbook of Social Choice and Welfare, edition 1, volume 1, chapter 6, pages 289-357
- Young, H.P., 1994. "Cost allocation," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 34, pages 1193-1235 Elsevier.
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