Responsibility And Cross-Subsidization In Cost Sharing
We propose two axiomatic theories of cost sharing with the common premise that agents demand comparable –though perhaps different– commodities and are responsible for their own demand. Under partial responsibility the agents are not responsible for the asymmetries of the cost function: two agents consuming the same amount of output always pay the same price; this holds true under full responsibility only if the cost function is symmetric in all individual demands. If the cost function is additively separable, each agent pays her stand alone cost under full responsibility; this holds true under partial responsibility only if, in addition, the cost function is symmetric. By generalizing Moulin and Shenker's (1999) Distributivity axiom to cost-sharing methods for heterogeneous goods, we identify in each of our two theories a different serial method. The subsidy-free serial method (Moulin, 1995) is essentially the only distributive method meeting Ranking and Dummy. The cross-subsidizing serial method (Sprumont, 1998) is the only distributive method satisfying Separability and Strong Ranking. Finally, we propose an alternative characterization of the latter method based on a strengthening of Distributivity.
|Date of creation:||2002|
|Date of revision:|
|Contact details of provider:|| Postal: C.P. 6128, Succ. centre-ville, Montréal (PQ) H3C 3J7|
Phone: (514) 343-6557
Fax: (514) 343-7221
Web page: http://www.cireq.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.:
- SPRUMONT, Yves, 1999.
"Coherent Cost-Sharing Rules,"
Cahiers de recherche
9902, Universite de Montreal, Departement de sciences economiques.
- Sprumont, Y., 1995.
"Balanced Egalitarian Redistribution of Income,"
Cahiers de recherche
9521, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Sprumont, Yves, 1998.
"Ordinal Cost Sharing,"
Journal of Economic Theory,
Elsevier, vol. 81(1), pages 126-162, July.
- 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.
- 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.
- Marc Fleurbaey & Walter Bossert, 1996. "Redistribution and compensation (*)," Social Choice and Welfare, Springer, vol. 13(3), pages 343-355.
- Roemer,John E., 1994.
Cambridge University Press, number 9780521450669.
- Samet, Dov & Tauman, Yair, 1982.
"The Determination of Marginal Cost Prices under a Set of Axioms,"
Econometric Society, vol. 50(4), pages 895-909, July.
- 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.
- Bossert, W., 1993.
"Redistribution Mechanisms Based on Individual Characteristics,"
9307, University of Waterloo, Department of Economics.
- Bossert, Walter, 1995. "Redistribution mechanisms based on individual characteristics," Mathematical Social Sciences, Elsevier, vol. 29(1), pages 1-17, February.
- Bossert W., 1996. "Redistribution mechanisms based on individual characteristics," Mathematical Social Sciences, Elsevier, vol. 31(1), pages 51-51, February.
- Wang, YunTong, 1999. "The additivity and dummy axioms in the discrete cost sharing model," Economics Letters, Elsevier, vol. 64(2), pages 187-192, August.
- Thom Bezembinder & Hans Maassen, 2002. "Generating random weak orders and the probability of a Condorcet winner," Social Choice and Welfare, Springer, vol. 19(3), pages 517-532.
- 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, 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
- Fleurbaey Marc, 1995. "Three Solutions for the Compensation Problem," Journal of Economic Theory, Elsevier, vol. 65(2), pages 505-521, April.
- Bertil Tungodden, 2001.
"Responsibility and Redistribution: The Case of First Best Taxation,"
CESifo Working Paper Series
545, CESifo Group Munich.
- Bertil Tungodden, 2005. "Responsibility and redistribution: The case of first best taxation," Social Choice and Welfare, Springer, vol. 24(1), pages 33-44, 06.
- Tungodden, B., 2000. "Responsibility and Redistribution: the Case of First Best Taxation," Papers 14/00, Norwegian School of Economics and Business Administration-.
- Ori Haimanko, 2000. "Value theory without symmetry," International Journal of Game Theory, Springer, vol. 29(3), pages 451-468.
- 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.
- Martin Shubik, 1962. "Incentives, Decentralized Control, the Assignment of Joint Costs and Internal Pricing," Management Science, INFORMS, vol. 8(3), pages 325-343, April.
- Moulin, Herve & Shenker, Scott, 1999.
"Distributive and Additive Costsharing of an Homogeneous Good,"
Games and Economic Behavior,
Elsevier, vol. 27(2), pages 299-330, May.
- Moulin, HervÈ & Shenker, Scott, 1997. "Distributive and Additive Costsharing of an Homogeneous Good," Working Papers 97-21, Duke University, Department of Economics.
- Moulin, Herve, 1995.
"On Additive Methods to Share Joint Costs,"
Mathematical Social Sciences,
Elsevier, vol. 30(1), pages 98-99, August.
- Eric Friedman & Moulin, Herve, 1995.
"Three Methods to Share Joint Costs or Surplus,"
95-38, Duke University, Department of Economics.
- Moulin, Herve & Shenker, Scott, 1992. "Serial Cost Sharing," Econometrica, Econometric Society, vol. 60(5), pages 1009-37, September.
- Young, H Peyton, 1985. "Producer Incentives in Cost Allocation," Econometrica, Econometric Society, vol. 53(4), pages 757-65, July.
When requesting a correction, please mention this item's handle: RePEc:mtl:montec:19-2002. 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.