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: Institute of Food and Resource Economics, University of Copenhagen
Author-Name:  Hervé Moulin
Author-Name-First: Hervé
Author-Name-Last: Moulin
Author-Email: moulin@rice.edu
Author-Workplace-Name: Department of Economics, Rice University
Title:  Sharing the Cost of Redundant Items
Abstract: We ask how to share the cost of finitely many public goods (items) among users with different needs: some smaller subsets of items are enough to serve the needs of each user, yet the cost of all items must be covered, even if this entails inefficiently paying for redundant items. Typical examples are network connectivity problems when an existing (possibly inefficient) network must be maintained.
We axiomatize a family of simple usage indices, one for each agent and for each item, measuring the relative worth of this item across agents, and generating cost sharing rules additive in costs.
Length: 22 pages
Creation-Date:  2012-09
File-URL: http://okonomi.foi.dk/workingpapers/MSAPpdf/MSAP2012/MSAP_WP06_2012.pdf
File-Format: Application/pdf
Number: 06_2012
Classification-JEL: C71, D30, D85, M41
Keywords: Cost sharing; Redundant costs; Connection networks; Connectivity
Handle: RePEc:foi:msapwp:06_2012