Journal of Korea Planning Association (국토계획)

Korea Planning Association (대한국토도시계획학회)
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The Application Scheme of Game Theoretic Approaches to Cost Allocation Problem on Multi-regional Water Supply

광역상수도 비용배분문제에 대한 게임이론접근법 도입방안 연구

Kim, Sang-U;Lee, Jeong-Jeon
김상우;이정전

  • Published : 20060000
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Abstract

Much-talked overinvestment in water supply facilities is partly due to the cost allocation problem associated with multi-regional water supply. Recognizing this fact, this paper is intended to propose a rational cost allocation mechanism that is based on the Shapley value method. The Shapley value method and it's special form, the serial cost sharing method satisfy the fairness conditions for the cost allocation. This is particularly relevant to the multi-regional water supply problem we face. Especially, the serial cost sharing method has an advantage in that it is relatively simple to apply. In addition to these two methods, this paper proposes a new version that combines the Shapley value method and the serial cost sharing method. Then, this version is applied to the case of Metropolitan water supply system. As a result of the application, it was estimated that the price of water per ton would decline by about 90 Won on the average. In addition, it was also estimated that more than 2 trillion Won could be saved in the national budget.

Keywords

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