Tuesday, February 14, 2012

23 February 2012: Cooperative Provision of Indivisible Public Goods

Pierre Dehez
University of Louvain

A community faces the obligation of providing an indivisible public good that each member is able to provide at a certain cost. The solution is to rely on the player who can do it at the lowest cost with due compensations from the other players. We model this problem as a cost sharing game. It turns out to be a kind of reverse airport game whose core has a regular structure. This is the main result of the paper. It enables an easy calculation of the nucleolus that defines compensations that are more appropriate than those derived from the Shapley value. Furthermore, they correspond to the solution derived from the auction procedures proposed by Kleindorfer and Sertel (1994).

Date: February 23, 2012
Time: 03:00 P.M.

AMEX Conference Room (Second Floor)
Department of Economics,
Delhi School of Economics,
New Delhi-110007(INDIA)


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