Search results for "cost allocation"
showing 8 items of 8 documents
Strategic sharing of a costly network
2012
We study minimum cost spanning tree problems for a set of users connected to a source. Prim’s algorithm provides a way of finding the minimum cost tree mm. This has led to several definitions in the literature, regarding how to distribute the cost. These rules propose different cost allocations, which can be understood as compensations and/or payments between players, with respect to the status quo point: each user pays for the connection she uses to be linked to the source. In this paper we analyze the rationale behind a distribution of the minimum cost by defining an a priori transfer structure. Our first result states the existence of a transfer structure such that no user is willing to …
SETUP OF VIRTUAL EXPERIMENTS AND CRITICAL ANALYSIS OF CONVENTIONAL THERMOECONOMIC DIAGNOSIS OF MULTIPLE FAULTS IN AIR-CONDENSED ROOFTOP SYSTEMS
2012
The diagnosis of soft faults in vapor compression cooling systems is a crucial activity, since malfunctions may provoke heavy degradation in plant performance and increase the power consumption for space cooling. Among the various Faults Detection and Diagnosis techniques developed over the last two decades, thermoeconomic diagnosis has been playing only a marginal role due to the difficulties encountered when applying the conventional thermoeconomic approaches to vapor compression refrigeration plants. In this paper a critical analysis on capabilities and limits of thermoeconomic diagnosis of refrigeration systems is proposed. The reference plant assumed for this study is a 116 kWc air-con…
The Serial Property and Restricted Balanced Contributions in discrete cost sharing problems
2006
We show that the Serial Poperty and Restricted Balanced Contributions characterize the subsidy-free serial cost sharing method (Moulin (1995)) in discrete cost allocation problems.
Scope-Oriented Thermoeconomic analysis of energy systems. Part I: Looking for a non-postulated cost accounting for the dissipative devices of a vapou…
2010
Abstract The authors of the main thermoeconomic methodologies developed in the last two decades have recently focused their efforts on the analysis of dissipative devices, i.e. those components whose productive purpose is neither intuitive nor easy to define. Coherent and unanimously accepted cost structures have been identified for dissipative components, while ambiguities still exist as concerns the cost allocation principles to be adopted. Being this aspect evidently cost-influencing, accurate analyses focused on the subjectivity of results are needed. This paper is structured in two parts. In the Part I an in-depth study of some critical issues arising from the thermoeconomic analysis o…
Incentive systems for risky investment decisions under unknown preferences
2017
Abstract Our paper examines how to design incentive systems for managers making multi-period risky investment decisions. We show how compensation functions and performance measures must be designed to ensure that managers implement the expected value-maximizing set of projects. The Relative Benefit Cost Allocation (RBCA) Scheme 1 and its extensions revealed in literature on unknown time preferences generally fail to do so under unknown time and risk preferences. We illustrate that when coping with such unknown preferences in a risky setting, a specific state-dependent allocation rule is required. We introduce such an allocation scheme, which we refer to as the State-Contingent RBCA Scheme, …
A contribution to the linear programming approach to joint cost allocation: Methodology and application
2009
Abstract The linear programming (LP) approach has been commonly proposed for joint cost allocation purposes. Within a LP framework, the allocation rules are based on a marginal analysis. Unfortunately, the additivity property which is required to completely allocate joint costs fails in presence of capacity, institutional or environmental constraints. In this paper, we first illustrate that the non allocated part can be interpreted as a type of producer’s surplus. Then, by using the information contained in the Simplex tableau we propose an original two-stage methodology based on the marginal costs and the production elasticity of input factors to achieve an additive cost allocation pattern…
Prices in Mixed Cost Allocation Problems
2001
Abstract We consider mixed cost allocation problems, i.e., joint cost problems that involve two types of heterogeneous outputs, divisible and indivisible. The Aumann–Shapley price mechanism is extended to this setting. We also present a set of properties which characterize this cost sharing rule. Journal of Economic Literature Classification numbers: D63, C79.
A non-cooperative approach to the folk rule in minimum cost spanning tree problems
2023
This paper deals with the problem of finding a way to distribute the cost of a minimum cost spanning tree problem between the players. A rule that assigns a payoff to each player provides this distribution. An optimistic point of view is considered to devise a cooperative game. Following this optimistic approach, a sequential game provides this construction to define the action sets of the players. The main result states the existence of a unique cost allocation in subgame perfect equilibria. This cost allocation matches the one suggested by the folk rule. The authors thank the support of the Spanish Ministry of Science, Innovation and Universities, the Spanish Ministry of Economy and Compe…