Conflicting Claims Problem Associated with Cost Sharing of a Network

José-Manuel Giménez-Gómez (), Begoña Subiza and Josep E. Peris

No 14-3, QM&ET Working Papers from University of Alicante, D. Quantitative Methods and Economic Theory

Abstract: A minimum cost spanning tree (mcst) problem analyzes the way to effciently connect individuals to a source when they are located at different places. Once the effcient tree is obtained, the question on how allocating the total cost among the involved agents defines, in a natural way, a conflicting claims situation. For instance, we may consider the endowment as the total cost of the network, whereas for each individual her claim is the maximum amount she will be allocated, that is, her connection cost to the source. Obviously, we have a conflicting claims problem, so we can apply claims rules in order to obtain an allocation of the total cost. Nevertheless, the allocation obtained by using claims rules might not satisfy some appealing properties in particular, it does not belong to the core of the associated cooperative game). We will define other natural claims problems that appear if we analyze the maximum and minimum amount that an individual should pay in order to support the minimum cost tree.

Keywords: Minimum cost spanning tree problem; Claims problem; Core (search for similar items in EconPapers)
JEL-codes: C71 D63 D71 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2014-07-28
New Economics Papers: this item is included in nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Working Paper: Conflicting claims problem associated with cost sharing of a network (2014)
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