Realizing fair outcomes in minimum cost spanning tree problems through non-cooperative mechanisms

In the context of minimum cost spanning tree problems, we present a bargaining mechanism for connecting all agents to the source and dividing the cost among them. The basic idea is very simple: we ask each agent the part of the cost he is willing to pay for an arc to be constructed. We prove that th...

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Bibliographic Details
Published in:European journal of operational research 2010-03, Vol.201 (3), p.811-820
Main Authors: Bergantiños, Gustavo, Vidal-Puga, Juan
Format: Article
Language:English
Subjects:
Allocations
Applied sciences
Bargaining
Exact sciences and technology
Flows in networks. Combinatorial problems
Game theory
Graph theory
Implementation
Minimum cost spanning tree problems
Minimum cost spanning tree problems Implementation
Operational research and scientific management
Operational research. Management science
Studies
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Summary:In the context of minimum cost spanning tree problems, we present a bargaining mechanism for connecting all agents to the source and dividing the cost among them. The basic idea is very simple: we ask each agent the part of the cost he is willing to pay for an arc to be constructed. We prove that there exists a unique payoff allocation associated with the subgame perfect Nash equilibria of this bargaining mechanism. Moreover, this payoff allocation coincides with the rule defined in Bergantiños and Vidal-Puga [Bergantiños, G., Vidal-Puga, J.J., 2007a. A fair rule in minimum cost spanning tree problems. Journal of Economic Theory 137, 326–352].
ISSN:0377-2217
1872-6860
DOI:10.1016/j.ejor.2009.04.003