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A `solidarity' approach to the problem of sharing a network cost

Giménez Gómez, José M. (José Manuel) and Begoña Subiza ()

Working Papers from Universitat Rovira i Virgili, Department of Economics

Abstract: A minimum cost spanning tree problem analyzes the way to efficiently connect individuals to a source when they are located at different places. Several rules have been defined to solve this problem. Our objective here is to propose a new approach that differentiates some costs that may deserve compensations (involuntary costs) from some other connection costs that may be considered voluntary. We therefore define a solidarity egalitarian solution, through which, the total cost is allocated by considering pay-backs to equalize the involuntary costs, thus fulfilling the weak stability condition of individual rationality. Keywords: Minimum cost spanning tree, Solidarity, Cost sharing, Egalitarian JEL classification: C71, D63, D71.

Keywords: Jocs cooperatius; 33 - Economia (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-des and nep-gth
Date: 2016
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