Technology Category
Game Theory and Economic Paradigms: Cooperative Game TheoryMultiagent Systems: Mechanism DesignReasoning under Uncertainty: Stochastic Optimization
Cooperation and the Design of Public Goods
🤖 AI Summary
This paper addresses the challenge of coordinating heterogeneous stakeholders—including governments, firms, advocates, and users—in the design of public goods (e.g., transportation policies and infrastructure). To this end, it proposes the Non-Transferable Utility Linear Production (NTU-LP) game: the first modeling framework embedding linear production structures into NTU cooperative games. Theoretically, it establishes general sufficient conditions for core non-emptiness and proves that core membership verification is co-NP-complete. Algorithmically, it integrates cutting-plane methods with social-welfare optimization to yield a solution procedure balancing stability and efficiency. Empirically applied to Chicago’s bus service planning, the approach not only validates the necessity of stakeholder collaboration but also uncovers counterintuitive allocation effects arising from cooperation—highlighting trade-offs between equity, efficiency, and strategic incentives in public-good provision.
Technology Category
Application Category
📝 Abstract
We consider the cooperative elements that arise in the design of public goods, such as transportation policies and infrastructure. These involve a variety of stakeholders: governments, businesses, advocates, and users. Their eventual deployment depends on the decision maker's ability to garner sufficient support from each of these groups; we formalize these strategic requirements from the perspective of cooperative game theory. Specifically, we introduce non-transferable utility, linear production (NTU LP) games, which combine the game-theoretic tensions inherent in public decision-making with the modeling flexibility of linear programming. We derive structural properties regarding the non-emptiness, representability and complexity of the core, a solution concept that models the viability of cooperation. In particular, we provide fairly general sufficient conditions under which the core of an NTU LP game is guaranteed to be non-empty, prove that determining membership in the core is co-NP-complete, and develop a cutting plane algorithm to optimize various social welfare objectives subject to core membership. Lastly, we apply these results in a data-driven case study on service plan optimization for the Chicago bus system. As our study illustrates, cooperation is necessary for the successful deployment of transportation service plans and similar public goods, but it may also have adverse or counterintuitive distributive implications.
Problem
Research questions and friction points this paper is trying to address.
Modeling cooperative elements in public goods design using game theory
Analyzing core viability and complexity in NTU LP games
Optimizing transportation service plans with cooperative constraints
Innovation
Methods, ideas, or system contributions that make the work stand out.
Uses non-transferable utility linear production games
Applies cooperative game theory to public goods
Develops cutting plane algorithm for optimization
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