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original papers: Proportionally adjusted marginal pricing method to share joint costs

Yuntong Wang ()

Review of Economic Design, 2002, vol. 7, issue 2, 205-211

Abstract: We consider the cost sharing problem with divisible demands of heterogeneous goods. We propose a cost sharing method called Proportionally Adjusted Marginal Pricing (PAMP) method. PAMP is a nonadditive (in the cost function) extension of average cost pricing. We introduce an axiom called Local Independence (LI) and use LI together with Continuity, Proportionality, and Scale Invariance to characterize PAMP.

Keywords: Nonadditive; cost; sharing; methods (search for similar items in EconPapers)
JEL-codes: C71 D62 D63 (search for similar items in EconPapers)
Date: 2002-10-09
Note: Received: 23 March 2001 / Accepted: 16 November 2001
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