Sharing cost of network among users with differentiated willingness to pay

Abstract

We consider the problem of sharing the cost of a fixed tree-network among users with differentiated willingness to pay for the good supplied through the network. We find that the associated value-sharing problem is convex, hence, the core is large and we axiomatize a new, computationally simple core selection based on the idea of proportionality.

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Reference

Elena Panova, “Sharing cost of network among users with differentiated willingness to pay”, TSE Working Paper, n. 22-1356, July 2022, revised March 2023.