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One-way and two-way cost allocation in hub network problems

Author

Listed:
  • G. Bergantiños

    (Universidade de Vigo)

  • J. Vidal-Puga

    (Universidade de Vigo)

Abstract

We consider a cost allocation problem arising from a hub network problem design. Finding an optimal hub network is NP-hard, so we start with a hub network that could be optimal or not. Our main objective is to divide the maintenance and/or building cost of such network among the nodes. We consider two cases. In the one-way flow case, we assume that the cost paid by a set of nodes depends only on the flow they send to other nodes (including nodes outside the set), but not on the flow they receive from nodes outside. In the two-way flow case, we assume that the cost paid by a set of nodes depends on the flow they send to other nodes (including nodes outside the set) and also on the flow they receive from nodes outside. In both cases, we study the core and the Shapley value of the corresponding cost game.

Suggested Citation

  • G. Bergantiños & J. Vidal-Puga, 2020. "One-way and two-way cost allocation in hub network problems," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 42(1), pages 199-234, March.
    • Handle: RePEc:spr:orspec:v:42:y:2020:i:1:d:10.1007_s00291-020-00573-1
    DOI: 10.1007/s00291-020-00573-1
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    More about this item

    Keywords

    Game theory; Hub network; Cost allocation; Core; Shapley value;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games

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