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)

Abstract

<br>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.</br> <br>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.</br> <br>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.</br>

• 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