Sharing the cost of redundant items

TY - JOUR

T1 - Sharing the cost of redundant items

AU - Hougaard, Jens Leth

AU - Moulin, Hervé

PY - 2014/9

Y1 - 2014/9

N2 - We ask how to share the cost of finitely many public goods (items) among users with different needs: some smaller subsets of items are enough to serve the needs of each user, yet the cost of all items must be covered, even if this entails inefficiently paying for redundant items. Typical examples are network connectivity problems when an existing (possibly inefficient) network must be maintained.We axiomatize a family cost ratios based on simple liability indices, one for each agent and for each item, measuring the relative worth of this item across agents, and generating cost allocation rules additive in costs.

AB - We ask how to share the cost of finitely many public goods (items) among users with different needs: some smaller subsets of items are enough to serve the needs of each user, yet the cost of all items must be covered, even if this entails inefficiently paying for redundant items. Typical examples are network connectivity problems when an existing (possibly inefficient) network must be maintained.We axiomatize a family cost ratios based on simple liability indices, one for each agent and for each item, measuring the relative worth of this item across agents, and generating cost allocation rules additive in costs.

U2 - 10.1016/j.geb.2014.05.010

DO - 10.1016/j.geb.2014.05.010

M3 - Journal article

SN - 0899-8256

VL - 87

SP - 339

EP - 352

JO - Games and Economic Behavior

JF - Games and Economic Behavior

ER -