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Multi-Product Serial Cost Sharing: an Incompatibility Result

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  • Téjédo, Cyril
  • Truchon, Michel

Abstract

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.

Suggested Citation

  • Téjédo, Cyril & Truchon, Michel, 1999. "Multi-Product Serial Cost Sharing: an Incompatibility Result," Cahiers de recherche 9919, Université Laval - Département d'économique.
  • Handle: RePEc:lvl:laeccr:9919
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    File URL: http://www.ecn.ulaval.ca/w3/recherche/cahiers/1999/9919.pdf
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    Cited by:

    1. 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 Elsevier.

    More about this item

    Keywords

    Cost Sharing; Serial Principle; Equal Treatment of Equals;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games

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