IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Fair Allocation of Production Externalities: Recent Results

  • SPRUMONT, Yves
  • MOULIN, Hervé

We survey recent axiomatic results in the theory of cost-sharing. In this litterature, a method computes the individual cost shares assigned to the users of a facility for any profile of demands and any monotonic cost function. We discuss two theories taking radically different views of the asymmetries of the cost function. In the full responsibility theory, each agent is accountable for the part of the costs that can be unambiguously separated and attributed to her own demand. In the partial responsibility theory, the asymmetries of the cost function have no bearing on individual cost shares, only the differences in demand levels matter. We describe several invariance and monotonicity properties that reflect both normative and strategic concerns. We uncover a number of logical trade-offs between our axioms, and derive axiomatic characterizations of a handful of intuitive methods: in the full responsibility approach, the Shapley-Shubik, Aumann-Shapley, and subsidyfree serial methods, and in the partial responsibility approach, the cross-subsidizing serial method and the family of quasi-proportional methods.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://hdl.handle.net/1866/551
Download Restriction: no

Paper provided by Universite de Montreal, Departement de sciences economiques in its series Cahiers de recherche with number 2005-22.

as
in new window

Length: 35 pages
Date of creation: 2005
Date of revision:
Handle: RePEc:mtl:montde:2005-22
Contact details of provider: Postal: CP 6128, Succ. Centre-Ville, Montréal, Québec, H3C 3J7
Phone: (514) 343-6540
Fax: (514) 343-5831
Web page: http://www.sceco.umontreal.ca

More information through EDIRC

References listed on IDEAS
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.:

as in new window
  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.
  2. Archer, Aaron & Feigenbaum, Joan & Krishnamurthy, Arvind & Sami, Rahul & Shenker, Scott, 2004. "Approximation and collusion in multicast cost sharing," Games and Economic Behavior, Elsevier, vol. 47(1), pages 36-71, April.
  3. 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.
  4. Ju, Biung-Ghi & Miyagawa, Eiichi & Sakai, Toyotaka, 2007. "Non-manipulable division rules in claim problems and generalizations," Journal of Economic Theory, Elsevier, vol. 132(1), pages 1-26, January.
  5. Moulin, Herve & Shenker, Scott, 1992. "Serial Cost Sharing," Econometrica, Econometric Society, vol. 60(5), pages 1009-37, September.
  6. Moulin, Herve & Sprumont, Yves, 2003. "On Demand Responsiveness in Additive Cost Sharing," Working Papers 2003-10, Rice University, Department of Economics.
  7. Moulin, Herve, 1994. "Serial Cost-Sharing of Excludable Public Goods," Review of Economic Studies, Wiley Blackwell, vol. 61(2), pages 305-25, April.
  8. Marc Fleurbaey & Walter Bossert, 1996. "Redistribution and compensation (*)," Social Choice and Welfare, Springer, vol. 13(3), pages 343-355.
  9. Biung-Ghi Ju & Eiichi Miyagawa & Toyotaka Sakai, 2003. "Non-Manipulable Division Rules in Claim Problems and Generalizations," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 200307, University of Kansas, Department of Economics, revised Aug 2005.
  10. Aadland, David & Kolpin, Van, 2004. "Environmental determinants of cost sharing," Journal of Economic Behavior & Organization, Elsevier, vol. 53(4), pages 495-511, April.
  11. 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.
  12. Hervé Moulin, 1995. "On Additive Methods To Share Joint Costs," The Japanese Economic Review, Japanese Economic Association, vol. 46(4), pages 303-332, December.
  13. Dov Samet & Yair Tauman, 1981. "The Determination of Marginal-Cost Prices Under a Set of Axioms," Discussion Papers 476, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  14. Yves Sprumont, 2005. "On the Discrete Version of the Aumann-Shapley Cost-Sharing Method," Econometrica, Econometric Society, vol. 73(5), pages 1693-1712, 09.
  15. Yves Sprumont, 2008. "Nearly serial sharing methods," International Journal of Game Theory, Springer, vol. 37(2), pages 155-184, June.
  16. Martin Shubik, 1961. "Incentives, Decentralized Control, the Assignment of Joint Costs and Internal Pricing," Cowles Foundation Discussion Papers 112, Cowles Foundation for Research in Economics, Yale University.
  17. Sprumont, Y., 1996. "Ordinal Cost Sharing," Cahiers de recherche 9624, Universite de Montreal, Departement de sciences economiques.
  18. Eric J. Friedman, 2004. "Paths and consistency in additive cost sharing," International Journal of Game Theory, Springer, vol. 32(4), pages 501-518, 08.
  19. Eric Friedman & Moulin, Herve, 1995. "Three Methods to Share Joint Costs or Surplus," Working Papers 95-38, Duke University, Department of Economics.
  20. Moulin, Herve & Sprumont, Yves, 2002. "Responsibility and Cross-Subsidization in Cost Sharing," Working Papers 2002-05, Rice University, Department of Economics.
  21. Roemer John E. & Silvestre Joaquim, 1993. "The Proportional Solution for Economies with Both Private and Public Ownership," Journal of Economic Theory, Elsevier, vol. 59(2), pages 426-444, April.
  22. William Thomson, 1999. "Welfare-domination under preference-replacement: A survey and open questions," Social Choice and Welfare, Springer, vol. 16(3), pages 373-394.
  23. repec:ner:tilbur:urn:nbn:nl:ui:12-78039 is not listed on IDEAS
  24. Ori Haimanko, 2000. "Value theory without symmetry," International Journal of Game Theory, Springer, vol. 29(3), pages 451-468.
  25. Flam, S. D. & Jourani, A., 2003. "Strategic behavior and partial cost sharing," Games and Economic Behavior, Elsevier, vol. 43(1), pages 44-56, April.
  26. Fleurbaey, Marc & Maniquet, Francois, 1996. "Cooperative Production: A Comparison of Welfare Bounds," Games and Economic Behavior, Elsevier, vol. 17(2), pages 200-208, December.
  27. repec:dgr:kubrem:1991478 is not listed on IDEAS
  28. Fleurbaey Marc, 1995. "Three Solutions for the Compensation Problem," Journal of Economic Theory, Elsevier, vol. 65(2), pages 505-521, April.
  29. Wang, YunTong, 1999. "The additivity and dummy axioms in the discrete cost sharing model," Economics Letters, Elsevier, vol. 64(2), pages 187-192, August.
  30. Moulin, Herve, 1990. "Joint Ownership of a Convex Technology: Comparison of Three Solutions," Review of Economic Studies, Wiley Blackwell, vol. 57(3), pages 439-52, July.
  31. Koster, M.A.L. & Tijs, S.H. & Borm, P.E.M., 1998. "Serial cost sharing methods for multi-commodity situations," Other publications TiSEM 6633be50-672a-42f3-a966-8, Tilburg University, School of Economics and Management.
  32. repec:cup:cbooks:9780521271943 is not listed on IDEAS
  33. Koster, Maurice & Tijs, Stef & Borm, Peter, 1998. "Serial cost sharing methods for multi-commodity situations," Mathematical Social Sciences, Elsevier, vol. 36(3), pages 229-242, December.
  34. Young, H Peyton, 1985. "Producer Incentives in Cost Allocation," Econometrica, Econometric Society, vol. 53(4), pages 757-65, July.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:mtl:montde:2005-22. 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: (Sharon BREWER)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.