Sharing the Cost of Redundant Items
We ask how to share the cost of finitely many public goods (items) among users with different needs: some smaller subsets of items are enough to serve the needs of each user, yet the cost of all items must be covered, even if this entails inefficiently paying for redundant items. Typical examples are network connectivity problems when an existing (possibly inefficient) network must be maintained. We axiomatize a family of simple usage indices, one for each agent and for each item, measuring the relative worth of this item across agents, and generating cost sharing rules additive in costs.
|Date of creation:||Sep 2012|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.ifro.ku.dk/english/|
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- Moulin, Herve, 2001.
"Axiomatic Cost and Surplis-Sharing,"
2001-06, Rice University, Department of Economics.
- Thomson, W., 1998.
"Consistency and its Converse: an Introduction,"
RCER Working Papers
448, University of Rochester - Center for Economic Research (RCER).
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- Hervé Moulin, 2013. "Cost Sharing In Networks: Some Open Questions," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 15(02), pages 1340001-1-1.
- Moulin, Herve & Laigret, Francois, 2011. "Equal-need sharing of a network under connectivity constraints," Games and Economic Behavior, Elsevier, vol. 72(1), pages 314-320, May.
- William Thomson, 2007. "Cost allocation and airport problems," RCER Working Papers 537, University of Rochester - Center for Economic Research (RCER).
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