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Independence of dummy units and Shapley-Shubik methods in cost sharing problems with technological cooperation

Eric Bahel () and Christian Trudeau ()

No 1304, Working Papers from University of Windsor, Department of Economics

Abstract: In the discrete cost sharing model with technological cooperation (Bahel and Trudeau (IJGT, 2013)), we study the implications of a number of properties that strengthen the well-known Dummy axiom. Our main axiom, which requires that costless units of demands do not affect the cost shares, is used to characterize two classes of rules. Combined with anonymity and a specific stability property, this requirement picks up sharing methods that allow the full compensation of at most one technological contribution. If instead we strengthen the well-known Dummy property to include agents whose technological contribution is offset by the cost of their demand, we are left with an adaptation of the Shapley-Shubik method that treats technologies as private and rewards their contributions. Our results provide two interesting axiomatizations for the adaptations of the Shapley-Shubik rule to our framework.

Keywords: Shapley-Shubik; Technological Cooperation; Dummy (search for similar items in EconPapers)
JEL-codes: C71 D63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth
Date: 2013-06
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http://web2.uwindsor.ca/economics/RePEc/wis/pdf/1304.pdf First version, 2013 (application/pdf)

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