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Shapley–Shubik methods in cost sharing problems with technological cooperation

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  • Eric Bahel
  • Christian Trudeau

Abstract

In the discrete cost sharing model with technological cooperation (Bahel and Trudeau in Int J Game Theory 42:439–460, 2013a ), we study the implications of a number of properties that strengthen the well-known dummy axiom. Our main axiom, which requires that costless units of demands do not affect the cost shares, is used to characterize two classes of rules. Combined with anonymity and a specific stability property, this requirement picks up sharing methods that allow the full compensation of at most one technological contribution. If instead we strengthen the well-known dummy property to include agents whose technological contribution is offset by the cost of their demand, we are left with an adaptation of the Shapley–Shubik method that treats technologies as private and rewards their contributions. Our results provide two interesting axiomatizations for the adaptations of the Shapley–Shubik rule to our framework. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Eric Bahel & Christian Trudeau, 2014. "Shapley–Shubik methods in cost sharing problems with technological cooperation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(2), pages 261-285, August.
    • Handle: RePEc:spr:sochwe:v:43:y:2014:i:2:p:261-285
    DOI: 10.1007/s00355-013-0775-6
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    References listed on IDEAS

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    1. Yves Sprumont, 2008. "Nearly serial sharing methods," International Journal of Game Theory, Springer;Game Theory Society, vol. 37(2), pages 155-184, June.
    2. Moulin, Herve & Sprumont, Yves, 2005. "On demand responsiveness in additive cost sharing," Journal of Economic Theory, Elsevier, vol. 125(1), pages 1-35, November.
    3. Sprumont, Yves, 1998. "Ordinal Cost Sharing," Journal of Economic Theory, Elsevier, vol. 81(1), pages 126-162, July.
    4. Hervé Moulin & Yves Sprumont, 2007. "Fair allocation of production externalities : recent results," Revue d'économie politique, Dalloz, vol. 117(1), pages 7-36.
    5. Hervé Moulin, 1995. "On Additive Methods To Share Joint Costs," The Japanese Economic Review, Japanese Economic Association, vol. 46(4), pages 303-332, December.
    6. Eric J. Friedman, 2004. "Paths and consistency in additive cost sharing," International Journal of Game Theory, Springer;Game Theory Society, vol. 32(4), pages 501-518, August.
    7. Martin Shubik, 1962. "Incentives, Decentralized Control, the Assignment of Joint Costs and Internal Pricing," Management Science, INFORMS, vol. 8(3), pages 325-343, April.
    8. Wang, YunTong, 1999. "The additivity and dummy axioms in the discrete cost sharing model," Economics Letters, Elsevier, vol. 64(2), pages 187-192, August.
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