Three methods to share joint costs or surplus

Friedman, E. and Moulin, H. (1999) Three methods to share joint costs or surplus. Journal of Economic Theory, 87(2), pp. 275-312. (doi:10.1006/jeth.1999.2534)

Full text not currently available from Enlighten.

Abstract

We study cost sharing methods with variable demands of heterogeneous goods, additive in the cost function and meeting the dummy axiom. We consider four axioms: scale invariance (SI); demand monotonicity (DM); upper bound for homogeneous goods (UBH) placing a natural cap on cost shares when goods are homogeneous; average cost pricing for homogeneous goods (ACPH). The random order values based on stand alone costs are characterized by SI and DM. Serial costsharing, by DM and UB; the Aumann–Shapley pricing method, by SI and ACPH. No other combination of the four axioms is compatible with additivity and dummy.

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

University Staff: Request a correction | Enlighten Editors: Update this record