Decentralized pricing in minimum cost spanning trees

Hougaard, J.L., Moulin, H. and Osterdal, L.P. (2010) Decentralized pricing in minimum cost spanning trees. Economic Theory, 44(2), pp. 293-306. (doi:10.1007/s00199-009-0485-6)

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Abstract

In the minimum cost spanning tree model we consider decentralized pricing rules, i.e., rules that cover at least the efficient cost while the price charged to each user only depends upon his own connection costs. We define a canonical pricing rule and provide two axiomatic characterizations. First, the canonical pricing rule is the smallest among those that improve upon the Stand Alone bound, and are either superadditive or piece-wise linear in connection costs. Our second, direct characterization relies on two simple properties highlighting the special role of the source cost.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Moulin, Professor Herve
Authors: Hougaard, J.L., Moulin, H., and Osterdal, L.P.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Economic Theory
Publisher:Springer
ISSN:0938-2259
ISSN (Online):1432-0479

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