Sharing the cost of a network: core and core allocations

This paper discusses the core of the game corresponding to the standard fixed tree problem. We consider the weighted adaptation of the constrained egalitarian solution of Dutta and Ray (1989). The core of the standard fixed tree game equals the set of all weighted constrained egalitarian solutions. Each weighted constrained egalitarian solution is determined (in polynomial time) as a home-down allocation, which creates further insight in the local behaviour of the weighted constrained egalitarian solution. The constrained egalitarian solution is characterized in terms of a cost sharing mechanism.

Authors and Affiliations

1. Faculty of Economics and Econometrics, Department of Quantitative Economics, University of Amsterdam, The Netherlands (E-mail: mkoster@fee.uva.nl), , , , , , NL

   M. Koster

2. Centro de Investigación Operativa, Universidad Miguel Hernández de Elche, Elche, Spain (E-mail: e.molina@umh.es), , , , , , ES

   E. Molina

3. C.R.D.E. et Département de sciences économiques, Université de Montréal, Montréal, Canada (E-mail: sprumony@crde.umontreal.ca), , , , , , CA

   Y. Sprumont

4. CentER and Department of Econometrics, Tilburg University, Tilburg, The Netherlands (E-mail: s.h.tijs@kub.nl), , , , , , NL

   S. H. Tijs

Final version November 2001

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