On demand responsiveness in additive cost sharing

Moulin, H. and Sprumont, Y. (2005) On demand responsiveness in additive cost sharing. Journal of Economic Theory, 125(1), pp. 1-35. (doi:10.1016/j.jet.2004.05.003)

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Abstract


Under partial responsibility, the ranking of cost shares should never contradict that of demands.The Solidarity axiom says that if agent i demands more, j should not pay more if k pays less. It characterizes the quasi-proportional methods, sharing cost in proportion to `rescaled' demands.

Full responsibility rules out cross-subsidization for additively separable costs. Restricting solidarity to submodular cost characterizes the fixed-flow methods, containing the Shapley–Shubik and serial methods.

The quasi-proportional methods meet—but most fixed-flow methods fail—Group Monotonicity: if a group of agents increase their demands, not all of them pay less. Serial cost sharing is an exception.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Moulin, Professor Herve
Authors: Moulin, H., and Sprumont, Y.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Journal of Economic Theory
Publisher:Elsevier
ISSN:0022-0531
ISSN (Online):1095-7235

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