Weighted Aumann-Shapley pricing

William Sharkey and Richard McLean

International Journal of Game Theory, 1998, vol. 27, issue 4, 523 pages

Abstract: Cost allocation problems arise in many contexts in economics and management science. In a typical problem that we have in mind, a decision maker must decide how to allocate the joint cost of production among several commodities using prices. Furthermore, these prices must satisfy certain reasonable postulates among which is the requirement that total revenue associated with these prices must cover total cost. In this paper, we investigate a generalization of Aumann-Shapley pricing, called Weighted Aumann-Shapley pricing, that allows for asymmetric pricing of commodities even when those commodities affect costs in a symmetric fashion. Weighted AS pricing is a natural extension of (symmetric) Aumann-Shapley pricing, and may be considered a non-atomic analogue of Owen's modified diagonal formula (with respect to the multilinear extension) for the weighted TU Shapley Value.

Keywords: Aumann-Shapley; pricing; ·; cost; allocation (search for similar items in EconPapers)
Date: 1998-12-16
Note: Received December 1993/Revised version June 1998
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://link.springer.de/link/service/journals/00182/papers/8027004/80270511.pdf (application/pdf)
Access to the full text of the articles in this series is restricted

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:spr:jogath:v:27:y:1998:i:4:p:511-523

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/182/PS2

Access Statistics for this article

International Journal of Game Theory is currently edited by Shmuel Zamir, Vijay Krishna and Bernhard von Stengel

More articles in International Journal of Game Theory from Springer, Game Theory Society
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().