Abstract
In this paper we design cost allocation rules for inventory games with private information. First, we design incentive-compatible cost allocation rules for inventory games with private information via Vickrey-Clarke-Groves (VCG) rules. Then, we propose incentive-compatible and approximate budget-balanced cost allocations via polynomial approximations such as the Chebyshev approximation and the Taylor approximation. In addition, we propose an incentive-compatible cost allocation with individual rationality. Finally, we conduct numerical experiments to compare the performance of the proposed cost allocations.
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