The game theory in cost allocation

Date of Publication

2009

Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Mathematics with specialization in Business Applications

Subject Categories

Mathematics

College

College of Science

Department/Unit

Mathematics and Statistics

Thesis Adviser

Ederlina G. Nocon

Defense Panel Chair

Anita C. Ong

Defense Panel Member

Yvette F. Lim
Michele G. Tan

Abstract/Summary

This paper is a partial exposition of the article written by Hobart Peyton Young entitled Cost Allocation [11], which can be found in the Handbook of Game Theory with Economic Applications by Robert J. Aumann and Sergiu Hart. We presented the basic concepts of cooperative game theory which is very useful in the analyses of cooperative game models and illustrated some allocation methods. This paper responded to the dilemma, If the grand coalition forms, how must the profit or cost be divided among the players? We enumerated sufficient and necessary conditions in order to create an idealized distribution of resources. In the end, the answer to the question, Who needs whom more? determines which proposed allocation will be taken into account. We offered different possible solutions to the problems of cost allocation. We analyzed various allocation methods and illustrated it on a TVA project. We gave a more detailed explanation to the Alternate Cost Avoided Method. The results of this thesis can be applied to real scenarios of similar problems.

Abstract Format

html

Language

English

Format

Print

Accession Number

TU15640

Shelf Location

Archives, The Learning Commons, 12F, Henry Sy Sr. Hall

Physical Description

v, 86, [22] leaves, color illustrations, 28 cm.

Keywords

Game theory; Cost allocation

Embargo Period

4-5-2021

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