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Fairness versus efficiency in charging for the use of common facilities

Author

Listed:
  • M Butler

    (University College Dublin)

  • H P Williams

    (The London School of Economics and Political Science)

Abstract

The problem of efficiency vs fairness is considered in relation to the splitting of costs for shared facilities between users. This is considered as a result of a problem of sharing the cost of the provision of central computing facilities between different faculties in a large university, but the basic problem is widespread. A linear programming model is considered in order to minimise cost. The dual of this model is shown to correspond to an efficient allocation of costs. An alternative optimal dual solution is shown to give a ‘fair’ solution according to criteria resulting from cooperative game theory.

Suggested Citation

  • M Butler & H P Williams, 2002. "Fairness versus efficiency in charging for the use of common facilities," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 53(12), pages 1324-1329, December.
    • Handle: RePEc:pal:jorsoc:v:53:y:2002:i:12:d:10.1057_palgrave.jors.2601456
    DOI: 10.1057/palgrave.jors.2601456
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    Citations

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    Cited by:

    1. Holland, Luke M. & Doole, Graeme J., 2014. "Implications of fairness for the design of nitrate leaching policy for heterogeneous New Zealand dairy farms," Agricultural Water Management, Elsevier, vol. 132(C), pages 79-88.
    2. Kimms, Alf & Çetiner, Demet, 2012. "Approximate nucleolus-based revenue sharing in airline alliances," European Journal of Operational Research, Elsevier, vol. 220(2), pages 510-521.
    3. Dimitris Bertsimas & Vivek F. Farias & Nikolaos Trichakis, 2011. "The Price of Fairness," Operations Research, INFORMS, vol. 59(1), pages 17-31, February.
    4. Dimitris Bertsimas & Vivek F. Farias & Nikolaos Trichakis, 2012. "On the Efficiency-Fairness Trade-off," Management Science, INFORMS, vol. 58(12), pages 2234-2250, December.
    5. White, Leroy & Bourne, Humphrey, 2007. "Voices and values: Linking values with participation in OR/MS in public policy making," Omega, Elsevier, vol. 35(5), pages 588-603, October.
    6. Nicosia, Gaia & Pacifici, Andrea & Pferschy, Ulrich, 2017. "Price of Fairness for allocating a bounded resource," European Journal of Operational Research, Elsevier, vol. 257(3), pages 933-943.
    7. Özlem Karsu & Hale Erkan, 2020. "Balance in resource allocation problems: a changing reference approach," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 42(1), pages 297-326, March.
    8. Tehrani Nejad Moghaddam, Alireza & Michelot, Christian, 2009. "A contribution to the linear programming approach to joint cost allocation: Methodology and application," European Journal of Operational Research, Elsevier, vol. 197(3), pages 999-1011, September.
    9. Klosterhalfen, Steffen T. & Kallrath, Josef & Frey, Markus M. & Schreieck, Anna & Blackburn, Robert & Buchmann, Jan & Weidner, Felix, 2019. "Creating cost transparency to support strategic planning in complex chemical value chains," European Journal of Operational Research, Elsevier, vol. 279(2), pages 605-619.

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