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Sharing costs in Swedish road ownership associations

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  • Grahn-Voorneveld, Sofia

    (VTI)

Abstract

Usually transport systems, and roads in particular, are viewed as public goods. However, this is not always the case. In Sweden a large part of the road system is privately owned. Most of these privately owned roads are rural roads used by farmers and summer cottage owners, or used for forest transport. The roads are mainly provided by ownership associations. The motivation of this paper is the practical problem of how such an ownership association can dicide the costs for the road netword among the members in a "fair" way. The problem is treated from a game theoretical point of view, making use of the Shapley value. This means that the problem is associated with a game – a mathematical representation of the conflict situation. The Shapley value is a very important solution concept for cooperative games, like tha game in this case. For games corresponding to this specific type of problems, it is shown that the Shapley value has excellent properties, such as being an element of the core, and being very easy to compute.

Suggested Citation

  • Grahn-Voorneveld, Sofia, 2011. "Sharing costs in Swedish road ownership associations," Working papers in Transport Economics 2011:6, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    • Handle: RePEc:hhs:ctswps:2011_006
    Note: This paper is published as: Grahn-Voorneveld, Sofia (2012) "Sharing costs in Swedish road ownership associations" Transportation Research Part A: Policy and practice, Vol. 46, no. 4, pp 645–651 http://dx.doi.org/10.1016/j.tra.2011.11.014
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    File URL: http://www.transportportal.se/SWoPEc/CTS2011-6.pdf
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    References listed on IDEAS

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    1. Tijs, S.H. & Driessen, T.S.H., 1986. "Game theory and cost allocation problems," Other publications TiSEM 376c24c5-c95d-4d29-96b6-4, Tilburg University, School of Economics and Management.
    2. Moulin, Herve & Shenker, Scott, 1996. "Strategyproof Sharing of Submodular Access Costs: Budget Balance versus Efficiency," Working Papers 96-31, Duke University, Department of Economics.
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    5. William Thomson, 2007. "Cost allocation and airport problems," RCER Working Papers 537, University of Rochester - Center for Economic Research (RCER).
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    More about this item

    Keywords

    Transport networks; cooperative game theory;

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General

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