Networks

Hub network games

Journal Article

Abstract

In hub communication networks, a certain subset of focal nodes (i.e., hubs) is fully interconnected, while other nodes are connected to those hubs. The communication between nodes is done exclusively via hubs. The advantage of hub networks is the usage of a relatively small number of links and exploitation of economies of scale by concentrating flows. Applications include telecommunications, airline traffic flow, and mail delivery networks. The cost of services delivered through a hub network is distributed among its users who may be individuals or organizations with possibly conflicting interests. The cooperation of these users is essential for the exploitation of economies of scale. Consequently, there is a need to find a fair distribution of the cost of providing the service among users of a hub network. To describe this cost allocation problem, we formulated several associated cooperative games, to be referred to as hub games, in which special attention is paid to the users' contribution to the economies of scale. We then demonstrate that certain cost allocation solutions (the core and the nucleolus of some hub games), which provide users with the incentive to cooperate, can be efficiently computed. © 1998 John Wiley & Sons, Inc. Networks 31: 293–302, 1998

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