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A characterization of a solution based on prices for a discrete cost sharing problem

Author

Listed:
  • Julio Macias-Ponce

    (Universidad Autónoma de Aguascalientes)

  • William Olvera-Lopez

    (Universidad Autónoma de San Luis Potosí)

Abstract

In this paper we characterize a solution for a discrete cost sharing problem where each agent requires a set of services but they can share them with each other. Also, the services provider can offer any subset of services. So, the agents have to distribute the cost of using the whole set of services amongst them. In our proposed solution, we work with the cost function as a cooperative game, and the Shapley value of this game is regarded as the price by each service. Then, we divide equally the service price among the agents who consume it. In addition, we show some properties that our solution satisfies.

Suggested Citation

  • Julio Macias-Ponce & William Olvera-Lopez, 2013. "A characterization of a solution based on prices for a discrete cost sharing problem," Economics Bulletin, AccessEcon, vol. 33(2), pages 1429-1437.
    • Handle: RePEc:ebl:ecbull:eb-13-00108
    as

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    References listed on IDEAS

    as
    1. Wang, Yun-Tong & Zhu, Daxin, 2002. "Ordinal proportional cost sharing," Journal of Mathematical Economics, Elsevier, vol. 37(3), pages 215-230, May.
    2. Yves Sprumont, 2005. "On the Discrete Version of the Aumann-Shapley Cost-Sharing Method," Econometrica, Econometric Society, vol. 73(5), pages 1693-1712, September.
    3. Calvo, Emilio & Santos, Juan Carlos, 2000. "A value for multichoice games," Mathematical Social Sciences, Elsevier, vol. 40(3), pages 341-354, November.
    4. Moulin, Herve, 1995. "On Additive Methods to Share Joint Costs," Mathematical Social Sciences, Elsevier, vol. 30(1), pages 98-99, August.
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    More about this item

    Keywords

    Cost sharing problem; Shapley value;

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C0 - Mathematical and Quantitative Methods - - General

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