Cost-Allocation Principles for Pipeline Capacity and Usage
This paper applies principles from game theory to the problem of allocating the cost of a shared facility, such as a pipeline. The theory of cooperative games strongly suggests that no method exists for allocating costs that will achieve all major policy goals. We apply results from the theory of cooperative games and principles of cost allocation to assess some commonly adopted rules for allocating costs and defining unit charges. Most notably, the postage-stamp toll is found to fail a minimal set of commonly applied principles.
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