A discussion of the consistency axiom in cost-allocation problems
The recent literature on cost allocation lacks consensus on what is an appropriate definition of the consistency axiom. We take this as evidence that a careful reexamination is necessary. The starting point of our critique is the widely adopted definition proposed in Moulin and Shenker (1994), which we show to be conceptually flawed. Rectifying this flaw leads to a definition of consistency which already appeared in the recent literature though without satisfactory conceptual justification. We offer a classification of the existing definitions of the consistency axiom by relating them to the definitions of consistency in cooperative games suggested in Davis and Maschler (1965) and Hart and Mas-Colell (1989). We argue that only the latter leads to a meaningful interpretation of consistency when production externalities are present.
|Date of creation:||Nov 2006|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (514) 340-6463
Fax: (514) 340-6469
Web page: http://www.hec.ca/iea/
More information through EDIRC
|Order Information:|| Postal: Institut d'économie appliquée HEC Montréal 3000, Chemin de la Côte-Sainte-Catherine Montréal, Québec H3T 2A7|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Moulin, Herve & Shenker, Scott, 1992. "Serial Cost Sharing," Econometrica, Econometric Society, vol. 60(5), pages 1009-37, September.
- Tadenuma, Koichi & Thomson, William, 1991. "No-Envy and Consistency in Economies with Indivisible Goods," Econometrica, Econometric Society, vol. 59(6), pages 1755-67, November.
- Albizuri, M. Josune & Zarzuelo, Jose M., 2007. "The dual serial cost-sharing rule," Mathematical Social Sciences, Elsevier, vol. 53(2), pages 150-163, March.
- 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, 2001.
"Axiomatic Cost and Surplis-Sharing,"
2001-06, Rice University, Department of Economics.
- Hart, Sergiu & Mas-Colell, Andreu, 1989. "Potential, Value, and Consistency," Econometrica, Econometric Society, vol. 57(3), pages 589-614, May.
- Thomson, William & Zhou, Lin, 1993. "Consistent Solutions in Atomless Economies," Econometrica, Econometric Society, vol. 61(3), pages 575-87, May.
- Manabu Toda, 2006. "Monotonicity and Consistency in Matching Markets," International Journal of Game Theory, Springer, vol. 34(1), pages 13-31, April.
- Chambers, Christopher P., 2005. "Allocation rules for land division," Journal of Economic Theory, Elsevier, vol. 121(2), pages 236-258, April.
- Tijs, S.H. & Koster, M.A.L., 1998. "General aggregation of demand and cost sharing methods," Other publications TiSEM 43bb1596-ff5b-4567-a25f-9, Tilburg University, School of Economics and Management.
- Sasaki, Hiroo, 1995. "Consistency and Monotonicity in Assignment Problems," International Journal of Game Theory, Springer, vol. 24(4), pages 373-97.
- Sonmez, Tayfun, 1994. "Consistency, monotonicity, and the uniform rule," Economics Letters, Elsevier, vol. 46(3), pages 229-235, November.
- repec:cup:cbooks:9780521027038 is not listed on IDEAS
- Lars Ehlers & Bettina Klaus, 2007.
"Consistent House Allocation,"
Springer, vol. 30(3), pages 561-574, March.
- Ehlers Lars & Klaus Bettina, 2005. "Consistent House Allocation," Research Memorandum 007, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
- EHLERS, Lars & KLAUS, Bettina, 2005. "Consistent House Allocation," Cahiers de recherche 08-2005, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- EHLERS, Lars & KLAUS, Bettina, 2005. "Consistent House Allocation," Cahiers de recherche 2005-08, Universite de Montreal, Departement de sciences economiques.
- repec:ner:tilbur:urn:nbn:nl:ui:12-79248 is not listed on IDEAS
- Sasaki, Hiroo & Toda, Manabu, 1992. "Consistency and characterization of the core of two-sided matching problems," Journal of Economic Theory, Elsevier, vol. 56(1), pages 218-227, February.
- repec:dgr:kubcen:199687 is not listed on IDEAS
- Eric J. Friedman, 2004. "Paths and consistency in additive cost sharing," International Journal of Game Theory, Springer, vol. 32(4), pages 501-518, 08.
- Marc Fleurbaey & Francois Maniquet, 1999. "Cooperative production with unequal skills: The solidarity approach to compensation," Social Choice and Welfare, Springer, vol. 16(4), pages 569-583.
- Lensberg, Terje, 1987. "Stability and Collective Rationality," Econometrica, Econometric Society, vol. 55(4), pages 935-61, July.
- Thomson, W., 1996. "Consistent Allocation Rules," RCER Working Papers 418, University of Rochester - Center for Economic Research (RCER).
When requesting a correction, please mention this item's handle: RePEc:iea:carech:0613. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Patricia Power)
If references are entirely missing, you can add them using this form.