Date of Submission

8-28-2002

Date of Award

8-28-2003

Institute Name (Publisher)

Indian Statistical Institute

Document Type

Doctoral Thesis

Degree Name

Doctor of Philosophy

Subject Name

Computer Science

Department

Economics and Planning Unit (EPU-Delhi)

Supervisor

Dutta, Bhaskar (EPU-Delhi; ISI)

Abstract (Summary of the Work)

There is a wide range of economic contexts in which aggregate costs have to be allocated amongst individual agents or components who derive t he benefits from a common project. A firm has to allocate overheard costs atmongst its different divisions. Regulatory authorities have to set taxes or fees on individual users for a variety of services. Partners in a joint venture must share costs (and benefits) of the joint venture. For example, when two doctors share an office they need to divide the cost of office space, medical equipment and secretarial help. If several municipalities use a common water supply system, they must reach an agreement on how to share the costs of operating it. When the members of NATO cooperate on common defense, they need to determine how to share the burden. In most of these examples, there is no external force such as the market, which determines the allocation of costs. Thus, the final allocation of costs is decided either by mutual agreement or by an arbitrator on the basis of some notion of distributive justice.The main thrust of this area of research is the axiomatic analysis of allocation rules. Such an axiomatic analysis is supposed to enlighten an arbitrator on the possible interpretations of fairness while dividing the cost among the participants. Ideally, the axiomatic method can help our choice of allocation rules by, first, reducing the number of plausible solutions as much as possible and second, by providing us with a specific axiomatic characterization of each of these plausible solutions.A central problem of cooperative game theory is how to divide the benefits of cooperation amongst individual players or agents. Since there is an obvious analogy between the division of costs and that of benefits, the tools of coop- erative game theory have proved very useful in the analysis of cost allocation problems. Moulin [1999] and Young [1994] are excellent surveys of this litera- true. Much of this literature has focused on general cost allocation problems, so that the ensuing cost game is identical to that of a typical game in characters- tic function form. This has facilitated the search for appropriate cost allocation rules considerably given the corresponding results in cooperative genie theory.In this monograph, we pursue this axiomatic analysis of cost allocation rules for a specific class of cost allocation problems known as Minimum Cost Spanning Tree games denoted as mn.c.s.t. games. The common feature of these problems is that a group of users has to be connected to a single supplier of some service. For instance, several towns may draw power from a common power plant, and hence have to share the cost of the distribution network. There is a positive cost of connecting each pair of users (towns) as well as a cost of connecting each user (town) to the common supplier (power plant). A cost game arises because cooperation reduces aggregate costs - it may be cheaper for town A to construct a link to town B which is nearer to the power plant, rather than build a separate link to the plant. An efficient network must be a tree which connects all users to the common supplier. That is why these game have been labeled minimum cost spanning tree games. In this monograph. construct a few interesting cost allocation rules over the efficient network and provide axiomatic characterization of these rules.

Comments

ProQuest Collection ID: http://gateway.proquest.com/openurl?url_ver=Z39.88-2004&rft_val_fmt=info:ofi/fmt:kev:mtx:dissertation&res_dat=xri:pqm&rft_dat=xri:pqdiss:28842927

Control Number

ISILib-TH132

Creative Commons License

Creative Commons Attribution 4.0 International License
This work is licensed under a Creative Commons Attribution 4.0 International License.

DOI

http://dspace.isical.ac.in:8080/jspui/handle/10263/2146

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