Allocation through reduction on minimum cost spanning tree games

Abstract

Bird (1976) introduced an allocation for minimum cost spanning tree games which belongs to the core. However Bird allocation fails to satisfy cost monotonicity. Dutta and Kar (2004) by constructing a new allocation, showed that it is possible to achieve core selection and cost monotonicity on minimum cost spanning tree games. This paper proposes a new class of parametric allocations. It shows that these rules are core selection and satisfy many other attractive properties. It also provides a necessary and sufficient condition on the parameter for cost monotonicity. Moreover it is shown that the Bird allocation and the Dutta-Kar allocation are two extreme points of this family.