Heterogeneous Cost Sharing, the Directional Serial Rule

Abstract

The focus is on the directional serial rule as a natural extension of the Moulin-Shenker cost sharing rule (Sprumont (1998)). We show that it is the unique regular rule that is compatible with the radial serial principle. In particular, this shows the incompatibility of the serial principle with differentiability of a cost sharing rule as a function of the individual demands. Other properties are discussed.