Bayesian serial cost sharing

Abstract

Shared productive facilities often entail incomplete information regarding attributes such as production costs, production quality, user lists, user preferences, etc. We formulate the notion of Bayesian cost share games to model such environments and find that many of the desirable features the serial cost-sharing rule enjoys in nonstochastic settings also extend to Bayesian frameworks. We also introduce the concept of normal goods to cost-sharing games and demonstrate that normality further strengthens the serial rule's appeal.