EconPapers    
Economics at your fingertips  
 

A study of the nucleolus in the nested cost-sharing problem: Axiomatic and strategic perspectives

Cheng-Cheng Hu, Min-Hung Tsay and Chun-Hsien Yeh

Games and Economic Behavior, 2018, vol. 109, issue C, 82-98

Abstract: We investigate the nucleolus from both axiomatic and strategic perspectives in the nested cost-sharing problem in which the cost of a public facility has to be shared among agents having different needs for it. We adopt a Right-endpoint Subtraction (RS) formulation, which underlies these two properties: RS bilateral consistency and RS converse consistency. As we show, the nucleolus is the only RS bilaterally consistent (or RS conversely consistent) rule satisfying equal treatment of equals and last-agent cost additivity. In addition, we introduce a game exploiting the two properties to strategically justify the nucleolus. Our results, together with the axiomatization and strategic justification of the Constrained Equal Benefits (CEB) rule in Hu et al. (2012), show that adopting different formulations to define a reduced problem leads to axiomatizing and, in particular, strategically justifying the CEB rule and the nucleolus in the nested cost-sharing problem.

Keywords: Consistency; Nash program; Axiomatization; Strategic justification; Nucleolus; Airport problem (search for similar items in EconPapers)
JEL-codes: C71 C72 D63 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0899825617302439
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:109:y:2018:i:c:p:82-98

Access Statistics for this article

Games and Economic Behavior is currently edited by E. Kalai

More articles in Games and Economic Behavior from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2018-06-23
Handle: RePEc:eee:gamebe:v:109:y:2018:i:c:p:82-98