On Analyzing Cost Allocation Problems: Cooperation Building Structures and Order Problem Representations

John Kleppe, Peter Borm, Ruud Hendrickx and Hans Reijnierse
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John Kleppe: Department of Econometrics and Operations Research, School of Economics and Management, Tilburg University, P. O. Box 90153, 5000 LE Tilburg, The Netherlands
Ruud Hendrickx: Department of Econometrics and Operations Research, School of Economics and Management, Tilburg University, P. O. Box 90153, 5000 LE Tilburg, The Netherlands
Hans Reijnierse: Department of Econometrics and Operations Research, School of Economics and Management, Tilburg University, P. O. Box 90153, 5000 LE Tilburg, The Netherlands

International Game Theory Review (IGTR), 2018, vol. 20, issue 04, 1-28

Abstract: To analyze cost allocation problems, this paper identifies associated cooperation building structures, with joint cost functions, and corresponding efficient order problem representations, with individualized cost functions. This paper presents an approach that, when applicable, offers a way not only to adequately model a cost allocation problem by means of a cooperative cost game, but also to construct a core element of such a game by means of a generalized Bird allocation. We apply the approach to both existing and new classes of cost allocation problems related to operational research problems: sequencing situations without initial ordering, maintenance problems, minimum cost spanning tree situations, permutation situations without initial allocation, public congestion network situations, traveling salesman problems, shared taxi problems and traveling repairman problems.

Keywords: Cost allocation problem; cooperation building structure; order problem representation; transferable utility game; generalized Bird allocation (search for similar items in EconPapers)
JEL-codes: C60 C71 (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1142/S021919891850007X

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