Allocating the costs of cleaning a river: expected responsibility versus median responsibility

Jorge Alcalde-Unzu (), María Gómez-Rúa and Elena Molis
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Jorge Alcalde-Unzu: Public University of Navarre

International Journal of Game Theory, 2021, vol. 50, issue 1, No 10, 185-214

Abstract: Abstract We consider the problem of cleaning a transboundary river, proposed by Ni and Wang (Games Econ Behav 60:176–186, 2007). A river is modeled as a segment divided into subsegments, each occupied by one region, from upstream to downstream. The waste is transferred from one region to the next at some rate. Since this transfer rate may be unknown, the social planner could have uncertainty over each region’s responsibility. Two natural candidates to distribute the costs in this setting would be the method that assigns to each region its expected responsibility and the one that assigns to each region its median responsibility. We show that the latter is equivalent to the Upstream Responsibility method (Alcalde-Unzu et al. in Games Econ Behav 90:134–150, 2015) and the former is a new method that we call Expected Responsibility. We compare both solutions and analyze them in terms of a new property of monotonicity.

Keywords: Cost allocation; Waste river; Expected responsibility; Median responsibility; Monotonicity (search for similar items in EconPapers)
JEL-codes: C71 D61 D62 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s00182-020-00746-w

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