Distributive and Additive Cost Sharing of an Homogeneous Good

TitleDistributive and Additive Cost Sharing of an Homogeneous Good
Publication TypeJournal Article
Year of Publication1999
AuthorsMoulin, H., & Shenker S. J.
Published inGames and Economic Behavior
Other Numbers3508

Individual users demand different quantities of a homogeneous good produced under variable returns. We describe the family of costsharing methods that allocate costs in proportion to demands when returns are constant, and commute with the additivity and composition of cost functions. Two simple such methods are average cost pricing and incremental costsharing. All other methods in the family combine elements of the average cost and incremental ones. Serial costsharing stands out prominently in the family, whereas the Shapley–Shubik method, and all values from the associated stand alone cooperative game, are excluded.

Bibliographic Notes

Games and Economic Behavior, Vol. 27, No. 2, pp. 299-330

Abbreviated Authors

H. Moulin and S. Shenker

ICSI Research Group

Networking and Security

ICSI Publication Type

Article in journal or magazine