An Axiomatic Approach to Cost Allocation for Public Investment

Abstract
A previously presented charge scheme for public investments is derived here from a set of axioms. It is argued that these axioms embody a definition of equity in allocating the costs of a public facility and could serve as a constitution which would be agreed on by users of a public facility. Consideration is also given to optimality properties of the charge scheme in encouraging the formation of coalitions to undertake joint investments.

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