Cost sharing with multiple technologies

Christian Trudeau

Games and Economic Behavior, 2009, vol. 67, issue 2, 695-707

Abstract: We study cost sharing problems where gains from cooperation can come from the presence of other agents, such as when agents share their technologies. A simple model is built, where economies of scale are eliminated in order to study this effect. We use as the key axiom the property that, if an agent does not improve the technology of any coalition he joins, he should not get any part of the gain from cooperation. With properties of linearity and symmetry, this axiom characterizes a well-defined set of rules. From this set, we propose a rule derived from the familiar Shapley value. We show that it is the only rule in that set satisfying an upper-limit property on individual cost allocations or a monotonicity property when technology improves. We also derive a distinct rule using a property that ensures that no coalition has an incentive to manipulate the individual demands of its members.

Keywords: Cost; sharing; Technology; Dummy; property; Shapley; value (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (8)

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