Minimum cost connection networks: truth-telling and implementation
Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
Standard
Minimum cost connection networks : truth-telling and implementation . / Hougaard, Jens Leth; Tvede, Mich.
I: Journal of Economic Theory, Bind 157, 2015, s. 76–99.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
Harvard
APA
Vancouver
Author
Bibtex
}
RIS
TY - JOUR
T1 - Minimum cost connection networks
T2 - truth-telling and implementation
AU - Hougaard, Jens Leth
AU - Tvede, Mich
N1 - Available online 29 December 2014
PY - 2015
Y1 - 2015
N2 - In the present paper we consider the allocation of costs in connection networks. Agents have connection demands in form of pairs of locations they want to have connected. Connections between locations are costly to build. The problem is to allocate costs of networks satisfying all connection demands. We use a few axioms to characterize allocation rules that truthfully implement cost minimizing networks satisfying all connection demands in a game where: (1) a central planner announces an allocation rule and a cost estimation rule; (2) every agent reports her own connection demand as well as all connection costs; (3) the central planner selects a cost minimizing network satisfying reported connection demands based on the estimated costs; and, (4) the planner allocates the true costs of the selected network. It turns out that an allocation rule satisfies the axioms if and only if relative cost shares are fixed.
AB - In the present paper we consider the allocation of costs in connection networks. Agents have connection demands in form of pairs of locations they want to have connected. Connections between locations are costly to build. The problem is to allocate costs of networks satisfying all connection demands. We use a few axioms to characterize allocation rules that truthfully implement cost minimizing networks satisfying all connection demands in a game where: (1) a central planner announces an allocation rule and a cost estimation rule; (2) every agent reports her own connection demand as well as all connection costs; (3) the central planner selects a cost minimizing network satisfying reported connection demands based on the estimated costs; and, (4) the planner allocates the true costs of the selected network. It turns out that an allocation rule satisfies the axioms if and only if relative cost shares are fixed.
U2 - 10.1016/j.jet.2014.12.009
DO - 10.1016/j.jet.2014.12.009
M3 - Journal article
VL - 157
SP - 76
EP - 99
JO - Journal of Economic Theory
JF - Journal of Economic Theory
SN - 0022-0531
ER -
ID: 130069073