IDEAS home Printed from https://ideas.repec.org/p/ams/ndfwpp/05-07.html
   My bibliography  Save this paper

Cost Sharing, Differential Games, and the Moulin-Shenker Rule

Author

Listed:
  • Koster, M.

    (Universiteit van Amsterdam)

Abstract

The Moulin-Shenker rule (Sprumont (1998)) is a nonlinear solution concept for solving heterogeneous cost sharing problems. The first part of the paper shows an axiomatic characterization of this solution using bounds on cost shares and consistency. The second part is devoted to differential games for heterogeneous production problems. It is shown for 2-player games that by an appropriate choice of the game dynamics there is essentially a unique Markov perfect Nash equilibrium. An axiomatic analysis follows for the appropriate game dynamics, which leads in turn to a strategic characterization of the Moulin-Shenker rule.

Suggested Citation

  • Koster, M., 2005. "Cost Sharing, Differential Games, and the Moulin-Shenker Rule," CeNDEF Working Papers 05-07, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
    • Handle: RePEc:ams:ndfwpp:05-07
    as

    Download full text from publisher

    File URL: http://cendef.uva.nl/binaries/content/assets/subsites/amsterdam-school-of-economics/amsterdam-school-of-economics-research-institute/cendef/working-papers-2005/moulinshenkerrule.pdf?1417181559850
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Thomson, William, 2015. "Axiomatic and game-theoretic analysis of bankruptcy and taxation problems: An update," Mathematical Social Sciences, Elsevier, vol. 74(C), pages 41-59.
    2. Sprumont, Yves, 1998. "Ordinal Cost Sharing," Journal of Economic Theory, Elsevier, vol. 81(1), pages 126-162, July.
    3. Moulin, Herve & Shenker, Scott, 1992. "Serial Cost Sharing," Econometrica, Econometric Society, vol. 60(5), pages 1009-1037, September.
    4. Kolpin, Van & Wilbur, Dameon, 2005. "Bayesian serial cost sharing," Mathematical Social Sciences, Elsevier, vol. 49(2), pages 201-220, March.
    5. 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.
    6. 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.
    7. Moulin, Herve, 2002. "Axiomatic cost and surplus sharing," Handbook of Social Choice and Welfare, in: K. J. Arrow & A. K. Sen & K. Suzumura (ed.), Handbook of Social Choice and Welfare, edition 1, volume 1, chapter 6, pages 289-357, Elsevier.
    8. Thomson, William, 2003. "Axiomatic and game-theoretic analysis of bankruptcy and taxation problems: a survey," Mathematical Social Sciences, Elsevier, vol. 45(3), pages 249-297, July.
    9. Young, H.P., 1994. "Cost allocation," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 34, pages 1193-1235, Elsevier.
    10. 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.
    11. Maniquet, Francois, 1996. "Allocation Rules for a Commonly Owned Technology: The Average Cost Lower Bound," Journal of Economic Theory, Elsevier, vol. 69(2), pages 490-507, May.
    12. Martin Shubik, 1962. "Incentives, Decentralized Control, the Assignment of Joint Costs and Internal Pricing," Management Science, INFORMS, vol. 8(3), pages 325-343, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hervé Moulin & Yves Sprumont, 2007. "Fair allocation of production externalities : recent results," Revue d'économie politique, Dalloz, vol. 117(1), pages 7-36.
    2. Moulin, Herve & Sprumont, Yves, 2006. "Responsibility and cross-subsidization in cost sharing," Games and Economic Behavior, Elsevier, vol. 55(1), pages 152-188, April.
    3. Sprumont, Yves, 2000. "Coherent Cost-Sharing Rules," Games and Economic Behavior, Elsevier, vol. 33(1), pages 126-144, October.
    4. Schouten, Jop & Groote Schaarsberg, Mirjam & Borm, Peter, 2020. "Cost Sharing Methods for Capacity Restricted Cooperative Purchasing Situations," Discussion Paper 2020-017, Tilburg University, Center for Economic Research.
    5. Bergantiños, Gustavo & Valencia-Toledo, Alfredo & Vidal-Puga, Juan, 2016. "Consistency in PERT problems," MPRA Paper 68973, University Library of Munich, Germany.
    6. Juarez, Ruben & Ko, Chiu Yu & Xue, Jingyi, 2018. "Sharing sequential values in a network," Journal of Economic Theory, Elsevier, vol. 177(C), pages 734-779.
    7. Koster, M.A.L., 1998. "Multi-Service Serial Cost Sharing : A Characterization of the Moulin-Shenker Rule," Discussion Paper 1998-06, Tilburg University, Center for Economic Research.
    8. Friedman, Eric J., 2012. "Asymmetric Cost Sharing mechanisms," Games and Economic Behavior, Elsevier, vol. 75(1), pages 139-151.
    9. Pham, Ngoc Anh, 2019. "Lorenz comparison between Increasing serial and Shapley value cost-sharing rules," Economics Letters, Elsevier, vol. 179(C), pages 49-52.
    10. Moulin, Herve, 2002. "Axiomatic cost and surplus sharing," Handbook of Social Choice and Welfare, in: K. J. Arrow & A. K. Sen & K. Suzumura (ed.), Handbook of Social Choice and Welfare, edition 1, volume 1, chapter 6, pages 289-357, Elsevier.
    11. Calvo, E. & Santos, J. C., 2001. "Prices in Mixed Cost Allocation Problems," Games and Economic Behavior, Elsevier, vol. 37(2), pages 243-258, November.
    12. Eric Bahel, 2011. "The implications of the ranking axiom for discrete cost sharing methods," International Journal of Game Theory, Springer;Game Theory Society, vol. 40(3), pages 551-589, August.
    13. Yves Sprumont, 2008. "Nearly serial sharing methods," International Journal of Game Theory, Springer;Game Theory Society, vol. 37(2), pages 155-184, June.
    14. Schouten, Jop, 2022. "Cooperation, allocation and strategy in interactive decision-making," Other publications TiSEM d5d41448-8033-4f6b-8ec0-c, Tilburg University, School of Economics and Management.
    15. 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.
    16. Maurice Koster, 2012. "Consistent cost sharing," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 75(1), pages 1-28, February.
    17. Aadland, David & Kolpin, Van, 2004. "Erratum to "Environmental determinants of cost sharing"," Journal of Economic Behavior & Organization, Elsevier, vol. 55(1), pages 105-121, September.
    18. 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.
    19. Moulin, Herve & Sprumont, Yves, 2005. "On demand responsiveness in additive cost sharing," Journal of Economic Theory, Elsevier, vol. 125(1), pages 1-35, November.
    20. Yves Sprumont, 2010. "An Axiomatization of the Serial Cost-Sharing Method," Econometrica, Econometric Society, vol. 78(5), pages 1711-1748, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ams:ndfwpp:05-07. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Cees C.G. Diks (email available below). General contact details of provider: https://edirc.repec.org/data/cnuvanl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.