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Multi-Product Serial Cost Sharing: an Incompatibility Result

  • Téjédo, Cyril
  • Truchon, Michel

The Serial Cost Sharing Rule has been conceived originally for problems where agents ask for different quantities of an homogeneous private good, the sum of which is produced by a single facility. Two important features of this rule is the equal treatment of equal demands and the protection it offers to smaller demanders against larger ones. A natural question is whether the Serial Cost Sharing Rule can be extended to a problem where agents demand more than one good, while keeping its interesting properties. We show that the equal treatment of equal demands and some form of protection of small demanders against larger ones, called the serial principle, are incompatible in a more general context. La règle de partage séquentiel des coûts a été conçue, à l'origine, pour le cas où les demandes des agents portent sur un bien privé homogène, produit par une technologie non reproductible. Les deux caractéristiques essentielles de cette règle sont le traitement égalitaire des égaux et la protection des petits demandeurs contre les plus grands. Une question naturelle est de savoir si la règle de partage séquentiel peut être généralisée au cas où les agents demandent plus d'un bien, tout en conservant ces deux caractéristiques. Nous montrons que le traitement égalitaire des égaux et une forme de protection des petits demandeurs contre les plus grands, appelée le principe séquentiel, sont incompatibles dans ce contexte plus général.

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Paper provided by Université Laval - Département d'économique in its series Cahiers de recherche with number 9919.

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Date of creation: 1999
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Handle: RePEc:lvl:laeccr:9919
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