Sharing the cost of redundant items

Hougaard, J. L. and Moulin, H. (2014) Sharing the cost of redundant items. Games and Economic Behavior, 87, pp. 339-352. (doi: 10.1016/j.geb.2014.05.010)

Abstract

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.<p></p> 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.<p></p>

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Moulin, Professor Herve
• Authors: Hougaard, J. L., and Moulin, H.
• College/School: College of Social Sciences > Adam Smith Business School > Economics
• Journal Name: Games and Economic Behavior
• Publisher: Academic Press
• ISSN: 0899-8256
• ISSN (Online): 1090-2473