Scandinavian Working Papers in Economics

Working papers in Transport Economics,
CTS - Centre for Transport Studies Stockholm (KTH and VTI)

No 2011:6: Sharing costs in Swedish road ownership associations

Sofia Grahn-Voorneveld ()
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Sofia Grahn-Voorneveld: VTI, Postal: Centrum för Transportstudier (CTS), Teknikringen 10, 100 44 Stockholm, Sweden

Abstract: Usually transport systems, and roads in particular, are viewed as public goods. However, this is not always the case. In Sweden a large part of the road system is privately owned. Most of these privately owned roads are rural roads used by farmers and summer cottage owners, or used for forest transport. The roads are mainly provided by ownership associations. The motivation of this paper is the practical problem of how such an ownership association can dicide the costs for the road netword among the members in a "fair" way. The problem is treated from a game theoretical point of view, making use of the Shapley value. This means that the problem is associated with a game – a mathematical representation of the conflict situation. The Shapley value is a very important solution concept for cooperative games, like tha game in this case. For games corresponding to this specific type of problems, it is shown that the Shapley value has excellent properties, such as being an element of the core, and being very easy to compute.

Keywords: Transport networks; cooperative game theory

JEL-codes: H71; L91

10 pages, November 2, 2011

Note: This paper is published as: Grahn-Voorneveld, Sofia (2012) "Sharing costs in Swedish road ownership associations" Transportation Research Part A: Policy and practice, Vol. 46, no. 4, pp 645–651 http://dx.doi.org/10.1016/j.tra.2011.11.014

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