Cooperative provision of indivisible public goods

A community faces the obligation of providing an indivisible public good that each of its members is able to provide at a certain cost. The solution is to rely on the member who can provide the public good at the lowest cost, with a due compensation from the other members. This problem has been studied in a non-cooperative setting by Kleindorfer and Sertel (J Econ Theory 64:20–34, 1994). They propose an auction mechanism that results in an interval of possible individual contributions whose lower bound is the equal division. Here, instead we take a cooperative stand point by modelling this problem as a cost sharing game that turns out to be a ‘reverse’ airport game whose core is shown to have a regular structure. This enables an easy calculation of the nucleolus that happens to define the upper bound of the Kleindorfer–Sertel interval. The Shapley value instead is not an appropriate solution in this context because it may imply compensations to non-providers.

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Document type	Article de périodique (Journal article) – Article de recherche
Access type	Accès interdit
Publication date	2013
Language	Anglais
Journal information	"Theory and Decision : an international journal for multidisciplinary advances in decision sciences" - Vol. 74, no.1, p. 13-29 (2013)
Peer reviewed	yes
Publisher	Springer New York LLC ((United States) New York)
issn	0040-5833
e-issn	1573-7187
Affiliation	UCL - SSH/LIDAM/CORE - Center for operations research and econometrics
Keywords	public goods ; cost sharing ; nucleolus ; Shapley value
Links	http://hdl.handle.net/2078.1/122433[Handle] https://doi.org/10.1007/s11238-012-9311-x[DOI]

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See also
	[boreal:33272]