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Strategyproof Nash Equilibria in Minimum Cost Spanning Tree Models

Author

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  • Jens Leth Hougaard

    (Department of Food and Resource Economics, University of Copenhagen)

  • Mich Tvede

    (Department of Economics, University of Copenhagen)

Abstract

In this paper we consider the Minimum Cost Spanning Tree model. We assume that a central planner aims at implementing the minimum cost spanning tree not knowing the true link costs. The central planner sets up a game where agents announce the link costs, a tree is chosen and costs are allocated according to the rules of the game. We characterize ways of allocating costs such that true announcements constitute Nash equilibria. In particular, we nd that the Shapley rule with respect to the irreducible cost matrix is consistent with truthful announcements while a series of other well-known rules (such as the Bird-rule, Serial Equal Split, the Proportional rule etc.) are not.

Suggested Citation

  • Jens Leth Hougaard & Mich Tvede, 2010. "Strategyproof Nash Equilibria in Minimum Cost Spanning Tree Models," MSAP Working Paper Series 01_2010, University of Copenhagen, Department of Food and Resource Economics.
    • Handle: RePEc:foi:msapwp:01_2010
    as

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    References listed on IDEAS

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