Applied cost allocation: The DEA-Aumann-Shapley approach

  title={Applied cost allocation: The DEA-Aumann-Shapley approach},
  author={Peter Bogetoft and Jens Leth Hougaard and Aleksandrs Smilgins},
  journal={European Journal of Operational Research},
This paper deals with empirical computation of Aumann–Shapley cost shares for joint production. We show that if one uses a mathematical programing approach with its non-parametric estimation of the cost function there may be observations in the data set for which we have multiple Aumann–Shapley prices. We suggest to overcome such problems by using lexicographic goal programing techniques. Moreover, cost allocation based on the cost function is unable to account for differences between efficient… CONTINUE READING

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