An Introduction to Allocation Rules

This book contains a systematic analysis of allocation rules related to cost and surplus sharing problems. Broadly speaking it examines various types of rules for allocating a common monetary value (cost) between individual members of a group (or network) when the characteristics of the problem are somehow objectively given. Without being an advanced text it o?ers a comprehensive mathematical analysis of a series of well-known allocation rules. The aim is to provide an overview and synthesis of current kno- edge concerning cost and surplus sharing methods. The text is accompanied by a description of several practical cases and numerous examples designed to make the theoretical results easily comprehensible for both students and practitioners alike. The book is based on a series of lectures given at the University of Copenhagen and Copenhagen Business School for graduate students joining the math/econ program. I am indebted to numerous colleagues conference participants and s- dents who during the years have shaped my approach and interests through collaboration commentsandquestionsthatweregreatlyinspiring.Inparti- lar I would like to thank Hans Keiding Maurice Koster Tobias Markeprand Juan D. Moreno-Ternero Herv´ e Moulin Bezalel Peleg Lars Thorlund- Petersen Jørgen Tind Mich Tvede and Lars Peter Østerdal.