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A `Solidarity' Approach to the Problem of Sharing a Network Cost

Author

Listed:
  • Giménez-Gómez, José M.

    (Universitat Rovira i Virgili, Departament d'Economia and CREIP)

  • Peris, Josep E.

    (University of Alicante, D. Quantitative Methods and Economic Theory)

  • Subiza, Begoña

    (University of Alicante, D. Quantitative Methods and Economic Theory)

Abstract

A minimum cost spanning tree problem analyzes the way to efficiently connect individuals to a source when they are located at different places. Several rules have been defined to solve this problem. Our objective here is to propose a new approach that differentiates some costs that may deserve compensations (involuntary costs) from some other connection costs that may be considered voluntary. We therefore define a solidarity egalitarian solution, through which, the total cost is allocated by considering pay-backs to equalize the involuntary costs, thus fulfilling the weak stability condition of individual rationality.

Suggested Citation

  • Giménez-Gómez, José M. & Peris, Josep E. & Subiza, Begoña, 2016. "A `Solidarity' Approach to the Problem of Sharing a Network Cost," QM&ET Working Papers 16-5, University of Alicante, D. Quantitative Methods and Economic Theory.
    • Handle: RePEc:ris:qmetal:2016_005
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    References listed on IDEAS

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    More about this item

    Keywords

    Minimum cost spanning tree; Solidarity; Cost sharing; Egalitarian;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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