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Allocation of costs to clean up a polluted river: an axiomatic approach

Author

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  • Wilson da C. Vieira

    (Federal University of Vicosa, Brazil)

Abstract

This paper proposes a method to share the costs of cleaning up a polluted river among the agents located along it. This method is based on a model of pollutant transport and the polluter pays principle. We provide an axiomatic characterization for this method and investigate its relationship with both the (weighted) Shapley value and the tau-value of the corresponding cost game generated from the problem. We show that the solution of the proposed method coincides with both the weighted Shapley value and the tau-value.

Suggested Citation

  • Wilson da C. Vieira, 2015. "Allocation of costs to clean up a polluted river: an axiomatic approach," Economics Bulletin, AccessEcon, vol. 35(2), pages 1216-1226.
    • Handle: RePEc:ebl:ecbull:eb-13-00603
    as

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    References listed on IDEAS

    as
    1. Haeringer, Guillaume, 2006. "A new weight scheme for the Shapley value," Mathematical Social Sciences, Elsevier, vol. 52(1), pages 88-98, July.
    2. Tijs, S.H., 1987. "An axiomatization of the ô-value," Other publications TiSEM 5536ac66-86f3-49fb-9e7d-2, Tilburg University, School of Economics and Management.
    3. Monderer, Dov & Samet, Dov & Shapley, Lloyd S, 1992. "Weighted Values and the Core," International Journal of Game Theory, Springer;Game Theory Society, vol. 21(1), pages 27-39.
    4. Tijs, Stef H., 1987. "An axiomatization of the [tau]-value," Mathematical Social Sciences, Elsevier, vol. 13(2), pages 177-181, April.
    5. Hung, Ming-Feng & Shaw, Daigee, 2005. "A trading-ratio system for trading water pollution discharge permits," Journal of Environmental Economics and Management, Elsevier, vol. 49(1), pages 83-102, January.
    6. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Water pollution; cost allocation; weighted Shapley value; tau-value.;
    All these keywords.

    JEL classification:

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

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