Incremental Cost Sharing in Chains and Fixed Trees

In this paper we consider a family of cost allocation rules for which agents pay a share of their incremental cost as well as of any ‘debt’ from prior agents. This family encompasses the Bird rule and the free riding rule (where terminal agents pay everything) as the two extreme cases. By axiomatic characterization it is demonstrated that a distinguishing feature of this family is that payments are independent of both the costs and the number of downstream agents.

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Year of publication:	2011
Authors:	Hougaard, Jens Leth ; Tvede, Mich
Institutions:	Centre of Management Science and Production Economics, Københavns Universitet
Subject:	Cost allocation \| Axiomatic characterization \| Bird allocation \| Incremental cost sharing

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Extent:	application/pdf
Series:	MSAP Working Paper Series.
Type of publication:	Book / Working Paper
Notes:	Number 02_2011 12 pages
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010822726