Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/87341
Authors: 
Estevez-Fernandez, Arantza
Reijnierse, Hans
Year of Publication: 
2012
Series/Report no.: 
Tinbergen Institute Discussion Paper 12-101/II
Abstract: 
In this paper, we analyze cost sharing problems arising from a general service by explicitly taking into account the generated revenues. To this cost-revenue sharing problem, we associate a cooperative game with transferable utility, called cost-revenue game. By considering cooperation among the agents using the general service, the value of a coalition is defined as the maximum net profit that the coalition may obtain by means of cooperation. As a result, a coalition may profit from not allowing all its members to get the service that generates the revenues. We focus on the study of the core of cost-revenue games. Under the assumption that cooperation among the members of the grand coalition grants the use of the service under consideration to all its members, it is shown that a cost-revenue game has a non-empty core for any vector of revenues if, and only if, the dual game of the cost game has a large core. Using this result, we investigate minimum cost spanning tree games with revenues. We show that if every connection cost can take only two values (low or high cost), then, the corresponding minimum cost spanning tree game with revenues has a non-empty core. Furthermore, we provide an example of a minimum cost spanning tree game with revenues with an empty core where every connection cost can take only one of three values (low, medium, or high cost).
Subjects: 
Cost-revenue allocation problem
cooperative game
core
minimum cost spanning tree problem
JEL: 
C71
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
254.7 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.