Merge-proofness and cost solidarity in shortest path games

Eric Bahel, María Gómez-Rúa and Juan Vidal-Puga

MPRA Paper from University Library of Munich, Germany

Abstract: We study cost-sharing rules in network problems where agents seek to ship quantities of some good to their respective locations, and the cost on each arc is linear in the flow crossing it. In this context, Core Selection requires that each subgroup of agents pay a joint cost share that is not higher than its stand-alone cost. We prove that the demander rule, under which each agent pays the cost of her shortest path for each unit she demands, is the unique cost-sharing rule satisfying both Core Selection and Merge Proofness. The Merge Proofness axiom prevents distinct nodes from reducing their joint cost share by merging into a single node. An alternative characterization of the demander rule is obtained by combining Core Selection and Cost Solidarity. The Cost Solidarity axiom says that each agent's cost share should be weakly increasing in the cost matrix.

Keywords: Shortest path games; cost sharing; core; merge proofness; solidarity (search for similar items in EconPapers)
JEL-codes: C71 D85 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-des, nep-gth and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/120606/1/MPRA_paper_120606.pdf original version (application/pdf)

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:pra:mprapa:120606

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().