Fairness versus efficiency in charging for the use of common facilities

Abstract

The problem of efficiency vs fairness is considered in relation to the splitting of costs for shared facilities between users. This is considered as a result of a problem of sharing the cost of the provision of central computing facilities between different faculties in a large university, but the basic problem is widespread. A linear programming model is considered in order to minimise cost. The dual of this model is shown to correspond to an efficient allocation of costs. An alternative optimal dual solution is shown to give a ‘fair’ solution according to criteria resulting from cooperative game theory.