APPLICATION OF THE AUMANN-SHAPLEY PRICES FOR COST ALLOCATION IN TRANSPORTATION PROBLEMS.

Dov Samet*, Yair Tauman, Israel Zang

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

42 Scopus citations

Abstract

The Aumann-Shapley (A-S) prices are axiomatically determined on certain classes of piecewise continuously differentiable cost functions. One of these classes consists of all cost functions derived from the transportation problems and some of their generalizations. These prices are used here to allocate costs among destinations in a way that each destination will pay its 'real part' in the total transportation costs. An economic transportation model is presented in which the A-S prices are compatible with consumer demands. Finally an algorithm is provided to calculate both the optimal solution and the associated A-S prices for transportation problems.

Original languageEnglish
Pages (from-to)25-42
Number of pages18
JournalMathematics of Operations Research
Volume9
Issue number1
DOIs
StatePublished - 1984

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