Strategic properties of heterogeneous serial cost sharing

Abstract

We show that the Serial Cost Sharing method for heterogeneous goods [J. Econ. Theory 87 (1999) 275], and a large number of other cost sharing mechanisms, have the same strong strategic properties as the Serial Cost Sharing method for homogeneous goods [J. Econ. Theory 64 (1992) 178; Econometrica 60 (1992) 1009], including uniqueness of the Nash equilibrium for all utility profiles and cost functions, dominance solvability, solvability in overwhelmed actions, and robustness to coalitional deviations. We describe several applications to cost/surplus sharing and the Internet.