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Optimization Based Characterizations of Cost Sharing Methods

Author

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  • Eric Friedman

    (Rutgers University)

Abstract

We provide several new characterizations of well known cost sharing methods (CSMs) as maxima of linear (or convex) functionals. For the Shapley-Shubik method the characterization has an interpretation in terms of randomly ordered agents choosing their most preferred CSM, while the characterizations of the Aumann-Shapley and Serial methods have a very general character: any symmetric convex functional which uniquely characterizes a scale invariant CSM must characterize the Aumann-Shapley method, while the identical statement is true for the Serial method when scale invariance is replaced by demand monotonicity.

Suggested Citation

  • Eric Friedman, 1999. "Optimization Based Characterizations of Cost Sharing Methods," Departmental Working Papers 199918, Rutgers University, Department of Economics.
    • Handle: RePEc:rut:rutres:199918
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    Cited by:

    1. Tudor Stoenescu & Mingyan Liu & Demosthenis Teneketzis, 2007. "Multirate multicast service provisioning I: an algorithm for optimal price splitting along multicast trees," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 65(2), pages 199-228, April.

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    Keywords

    cost allocation;

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