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Sharing costs in Swedish road ownership associations

  • Grahn-Voorneveld, Sofia

    ()

    (VTI)

Registered author(s):

    Usually transport systems, and roads in particular, are viewed as public goods. However, this is not always the case. In Sweden a large part of the road system is privately owned. Most of these privately owned roads are rural roads used by farmers and summer cottage owners, or used for forest transport. The roads are mainly provided by ownership associations. The motivation of this paper is the practical problem of how such an ownership association can dicide the costs for the road netword among the members in a "fair" way. The problem is treated from a game theoretical point of view, making use of the Shapley value. This means that the problem is associated with a game – a mathematical representation of the conflict situation. The Shapley value is a very important solution concept for cooperative games, like tha game in this case. For games corresponding to this specific type of problems, it is shown that the Shapley value has excellent properties, such as being an element of the core, and being very easy to compute.

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    File URL: http://www.transportportal.se/SWoPEc/CTS2011-6.pdf
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    Paper provided by CTS - Centre for Transport Studies Stockholm (KTH and VTI) in its series Working papers in Transport Economics with number 2011:6.

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    Length: 10 pages
    Date of creation: 02 Nov 2011
    Date of revision:
    Handle: RePEc:hhs:ctswps:2011_006
    Note: This paper is published as: Grahn-Voorneveld, Sofia (2012) "Sharing costs in Swedish road ownership associations" Transportation Research Part A: Policy and practice, Vol. 46, no. 4, pp 645–651 http://dx.doi.org/10.1016/j.tra.2011.11.014
    Contact details of provider: Postal: Centrum för Transportstudier (CTS), Teknikringen 10, 100 44 Stockholm, Sweden
    Web page: http://www.cts.kth.se/

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    1. Tijs, S.H. & Driessen, T.S.H., 1986. "Game theory and cost allocation problems," Other publications TiSEM 376c24c5-c95d-4d29-96b6-4, Tilburg University, School of Economics and Management.
    2. S. H. Tijs & T. S. H. Driessen, 1986. "Game Theory and Cost Allocation Problems," Management Science, INFORMS, vol. 32(8), pages 1015-1028, August.
    3. S. C. Littlechild & G. Owen, 1973. "A Simple Expression for the Shapley Value in a Special Case," Management Science, INFORMS, vol. 20(3), pages 370-372, November.
    4. William Thomson, 2007. "Cost allocation and airport problems," RCER Working Papers 537, University of Rochester - Center for Economic Research (RCER).
    5. Moulin, Herve & Shenker, Scott, 1996. "Strategyproof Sharing of Submodular Access Costs: Budget Balance versus Efficiency," Working Papers 96-31, Duke University, Department of Economics.
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