Common Cost Allocation in the Firm

Twenty years ago. Martin Shubik suggested that the Shapley value of a game be used to allocate accounting costs. While that suggestion has-spawned a number of cost allocation proposals based on game-theoretic constructs, these studIes comprise only one of several major streams of cost allocation research. This study provides a framework in which the major streams of cost allocation research are evaluated and compared, with a special emphasis on those areas which relate to common cost allocation in the firm. This paper is a condensed version of "Allocations of Joint and Common Costs".

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