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Aumann-Shapley Pricing : A Reconsideration of the Discrete Case

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  • SPRUMONT, Yves

Abstract

We reconsider the following cost-sharing problem: agent i = 1,...,n demands a quantity xi of good i; the corresponding total cost C(x1,...,xn) must be shared among the n agents. The Aumann-Shapley prices (p1,...,pn) are given by the Shapley value of the game where each unit of each good is regarded as a distinct player. The Aumann-Shapley cost-sharing method assigns the cost share pixi to agent i. When goods come in indivisible units, we show that this method is characterized by the two standard axioms of Additivity and Dummy, and the property of No Merging or Splitting: agents never find it profitable to split or merge their demands.

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  • SPRUMONT, Yves, 2004. "Aumann-Shapley Pricing : A Reconsideration of the Discrete Case," Cahiers de recherche 2004-08, Universite de Montreal, Departement de sciences economiques.
  • Handle: RePEc:mtl:montde:2004-08
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    Cited by:

    1. Moulin, Herve, 2005. "Split-Proof Probabilistic Scheduling," Working Papers 2004-06, Rice University, Department of Economics.
    2. Moulin, Herve & Sprumont, Yves, 2005. "On demand responsiveness in additive cost sharing," Journal of Economic Theory, Elsevier, vol. 125(1), pages 1-35, November.
    3. Hervé Moulin, 2007. "On Scheduling Fees to Prevent Merging, Splitting, and Transferring of Jobs," Mathematics of Operations Research, INFORMS, vol. 32(2), pages 266-283, May.

    More about this item

    Keywords

    Cost sharing; Aumann-Shaey icing; merging; sitting;

    JEL classification:

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

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