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Heterogeneous cost sharing, the directional serial rule

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  • Maurice Koster

Abstract

The directional serial rule is introduced as a natural serial extension, generalizing the Moulin–Shenker cost sharing rule to heterogeneous cost sharing models. It is the unique regular rule compatible with the radial serial principle. In particular, this shows the incompatibility of the serial principle with differentiability of a cost sharing rule as a function of the individual demands. Copyright Springer-Verlag 2006

Suggested Citation

  • Maurice Koster, 2006. "Heterogeneous cost sharing, the directional serial rule," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 64(3), pages 429-444, December.
    • Handle: RePEc:spr:mathme:v:64:y:2006:i:3:p:429-444
    DOI: 10.1007/s00186-006-0093-1
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    References listed on IDEAS

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    1. Sprumont, Yves, 1998. "Ordinal Cost Sharing," Journal of Economic Theory, Elsevier, vol. 81(1), pages 126-162, July.
    2. Moulin, Herve & Shenker, Scott, 1992. "Serial Cost Sharing," Econometrica, Econometric Society, vol. 60(5), pages 1009-1037, September.
    3. 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.
    4. Louis J. Billera & David C. Heath, 1982. "Allocation of Shared Costs: A Set of Axioms Yielding A Unique Procedure," Mathematics of Operations Research, INFORMS, vol. 7(1), pages 32-39, February.
    5. Friedman, Eric & Moulin, Herve, 1999. "Three Methods to Share Joint Costs or Surplus," Journal of Economic Theory, Elsevier, vol. 87(2), pages 275-312, August.
    6. Kolpin, Van, 1998. "Equitable Nonlinear Price Regulation: An Alternative Approach to Serial Cost Sharing," Games and Economic Behavior, Elsevier, vol. 22(1), pages 61-83, January.
    7. 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.
    8. Moulin, Herve, 1996. "Cost Sharing under Increasing Returns: A Comparison of Simple Mechanisms," Games and Economic Behavior, Elsevier, vol. 13(2), pages 225-251, April.
    9. Koster, M.A.L., 1998. "Multi-Service Serial Cost Sharing : A Characterization of the Moulin-Shenker Rule," Other publications TiSEM 4d029e40-e4e7-4f90-b963-d, Tilburg University, School of Economics and Management.
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    Cited by:

    1. M. Albizuri & M. Álvarez-Mozos, 2016. "The $$a$$ a -serial cost sharing rule," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 24(1), pages 73-86, March.

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    More about this item

    Keywords

    Cost sharing; Serial rule; Moulin–Shenker rule; Multi-service facilities; Non-linear pricing; C67; D20; D42; D63; E23;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D20 - Microeconomics - - Production and Organizations - - - General
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production

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