Cooperative facility location games

The location of facilities in order to provide service for customers is a well-studied problem in the operations research literature. In the basic model, there is a predefined cost for opening a facility and also for connecting a customer to a facility, the goal being to minimize the total cost. Often, both in the case of public facilities (such as libraries, municipal swimming pools, fire stations, ...) and private facilities (such as distribution centers, switching stations, ...), we may want to find a `fair' allocation of the total cost to the customers--this is known as the cost allocation problem. A central question in cooperative game theory is whether the total cost can be allocated to the customers such that no coalition of customers has any incentive to build their own facility or to ask a competitor to service them. We establish strong connections between fair cost allocations and linear programming relaxations for several variants of the facility location problem. In p...

• Type: Conference
• Year: 2000
• Where: SODA
• Authors: Michel X. Goemans, Martin Skutella
• Keywords: Algorithms, Cost Allocation, Fair Cost Allocation, SODA 2000, Total Cost