Incremental cost sharing: Characterization by coalition strategy-proofness
Herve Moulin ()
Social Choice and Welfare, 1999, vol. 16, issue 2, 279-320
Each one of n users consumes an idiosyncratic commodity produced in indivisible units. The n commodities are jointly produced by a central facility and total cost must be shared by the users. A "sequential stand alone mechanism" shares costs incrementally according to a fixed ordering of the users: the first user always pays stand alone cost, the second pays the stand alone cost of the first two users minus that of the first and so on. If the second derivatives of costs are of a constant sign, such a method yields a unique strong equilibrium at every profile of convex preferences in the game where each user chooses his own demand. This equilibrium, in turn, defines a coalition strategy-proof social choice function. Under decreasing marginal costs and submodular costs, the sequential stand alone mechanisms are almost characterized by these properties; the only exception is the binary demand case (each agent consumes zero or one unit) where a rich family of cost sharing methods (the Shapley value among them) yields a coalition strategy-proof equilibrium selection. Under increasing marginal costs and supermodular costs, coalition strategy-proofness characterizes a richer family of cost sharing methods: they give out one unit at a time while charging marginal costs, with the users taking turns according to a sequence fixed in advance. These methods contain serial cost sharing as a limit case.
Note: Received: 8 July 1997/Accepted: 22 January 1998
References: Add references at CitEc
Citations: View citations in EconPapers (36) Track citations by RSS feed
Downloads: (external link)
Access to the full text of the articles in this series is restricted
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:spr:sochwe:v:16:y:1999:i:2:p:279-320
Ordering information: This journal article can be ordered from
http://www.springer. ... c+theory/journal/355
Access Statistics for this article
Social Choice and Welfare is currently edited by Bhaskar Dutta, Marc Fleurbaey, Elizabeth Maggie Penn and Clemens Puppe
More articles in Social Choice and Welfare from Springer, The Society for Social Choice and Welfare Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().