Average Cost Pricing Versus Serial Cost Sharing: An Axiomatic Comparison
| Title | Average Cost Pricing Versus Serial Cost Sharing: An Axiomatic Comparison |
| Publication Type | Journal Article |
| Year of Publication | 1994 |
| Authors | Moulin, H., & Shenker S. J. |
| Published in | Journal of Economic Theory |
| Volume | 64 |
| Issue | 1 |
| Page(s) | 178-201 |
| Other Numbers | 3503 |
| Abstract | A finite group of agents share a (one output) production function. A cost sharing rule allocates the total cost among the users for every conceivable profile of output demands. We investigate the space of possible cost sharing rules from an axiomatic perspective. We provide two characterizations of average cost pricing, one based on the axioms of Additivity and Monotonicity (both with respect to the cost function), and the other based on the axioms of Additivity and a version of Consistency. We also provide a characterization of serial cost sharing based, essentially, on Additivity and a Free Lunch axiom. |
| Bibliographic Notes | Journal of Economic Theory, Vol. 64, No. 1, pp. 178-201 |
| Abbreviated Authors | H. Moulin and S. Shenker |
| ICSI Research Group | Networking and Security |
| ICSI Publication Type | Article in journal or magazine |