Cost Sharing Mechanisms for Business Clusters with Strategic Firms

Ashwin, B and Narahari, Y and Biswas, SK (2008) Cost Sharing Mechanisms for Business Clusters with Strategic Firms. In: IEEE International Conference on Automation Science and Engineering, AUG 23-26, 2008, Arlington.

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Abstract

A business cluster is a co-located group of micro, small, medium scale enterprises. Such firms can benefit significantly from their co-location through shared infrastructure and shared services. Cost sharing becomes an important issue in such sharing arrangements especially when the firms exhibit strategic behavior. There are many cost sharing methods and mechanisms proposed in the literature based on game theoretic foundations. These mechanisms satisfy a variety of efficiency and fairness properties such as allocative efficiency, budget balance, individual rationality, consumer sovereignty, strategyproofness, and group strategyproofness. In this paper, we motivate the problem of cost sharing in a business cluster with strategic firms and illustrate different cost sharing mechanisms through the example of a cluster of firms sharing a logistics service. Next we look into the problem of a business cluster sharing ICT (information and communication technologies) infrastructure and explore the use of cost sharing mechanisms.

Item Type:	Conference Paper
Publisher:	IEEE
Additional Information:	Copyright 2008 IEEE. Personal use of this material is permitted. However, permission to reprint/republish this material for advertising or promotional purposes or for creating new collective works for resale or redistribution to servers or lists, or to reuse any copyrighted component of this work in other works must be obtained from the IEEE.
Department/Centre:	Division of Electrical Sciences > Computer Science & Automation
Date Deposited:	10 Mar 2010 09:45
Last Modified:	19 Sep 2010 05:56
URI:	http://eprints.iisc.ac.in/id/eprint/26084

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