Template-Type: ReDIF-Paper 1.0
Author-Name:  Jens Leth Hougaard
Author-Name-First: Jens Leth
Author-Name-Last: Hougaard
Author-Email: jlh@foi.ku.dk
Author-Workplace-Name: Department of Food and Resource Economics, University of Copenhagen
Author-Name:  Mich Tvede
Author-Name-First: Mich
Author-Name-Last: Tvede
Author-Email:  mich.tvede@econ.ku.dk
Author-Workplace-Name: Department of Economics, University of Copenhagen
Title:  Strategyproof Nash Equilibria in Minimum Cost Spanning Tree Models
Abstract: In this paper we consider the Minimum Cost Spanning Tree model. We assume that a central planner aims at implementing the minimum cost spanning tree not knowing the true link costs. The central planner sets up a game where agents announce the link costs, a tree is chosen and costs are allocated according to the rules of the game. We characterize ways of allocating costs such that true announcements constitute Nash equilibria. In particular, we nd that the Shapley rule with respect to the irreducible cost matrix is consistent with truthful announcements while a series of other well-known rules (such as the Bird-rule, Serial Equal Split, the Proportional rule etc.) are not.
Length:  20 pages
Creation-Date:  2010-01
File-URL: http://okonomi.foi.dk/workingpapers/MSAPpdf/MSAP2010/MSAP_WP01_2010.pdf
File-Format: Application/pdf
Number: 01_2010
Classification-JEL: 
Keywords: Minimum cost spanning tree, Strategyproof Implementation, Nash equilibrium, Shapley value
Handle: RePEc:foi:msapwp:01_2010