Cost Allocation in a Bank ATM Network

CentER Working Paper No. 2003-13

Posted: 26 May 2004

See all articles by Endre Bjorndal

Endre Bjorndal

Norwegian School of Economics (NHH) - Department of Business and Management Science

Herbert Hamers

Tilburg University - Center for Economic Research (CentER); Tilburg University - Department of Econometrics & Operations Research

Maurice Koster

Amsterdam School of Economics, University of Amsterdam

Date Written: 2003

Abstract

We consider a situation in which a group of banks consider connecting their Automated Teller Machines (ATMs) in a network, so that the banks customers may use ATMs of any bank in the network. The problem studied is that of allocating the total transaction costs arising in the network, among the participating banks. The situation is modeled as a cooperative game with transferable utility. We propose two allocation rules, and discuss their relation to the core and other well-known solution concepts, as well as to population monotonicity.

Suggested Citation

Bjorndal, Endre and Hamers, Herbert and Koster, Maurice, Cost Allocation in a Bank ATM Network (2003). CentER Working Paper No. 2003-13. Available at SSRN: https://ssrn.com/abstract=550122

Endre Bjorndal

Norwegian School of Economics (NHH) - Department of Business and Management Science ( email )

Helleveien 30
Bergen, NO-5045
Norway

Herbert Hamers (Contact Author)

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 4666 2660 (Phone)

Tilburg University - Department of Econometrics & Operations Research

Tilburg, 5000 LE
Netherlands

Maurice Koster

Amsterdam School of Economics, University of Amsterdam ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands
+31 205254226 (Phone)

HOME PAGE: http://www.uva.nl/profiel/k/o/m.a.l.koster/m.a.l.koster.html

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