ON THE CORE OF THE NETWORK DESIGN GAME

Abstract

We consider a cooperative game on a communication network system whose objective is to find a fair allocation of the total cost for constructing the network among customers. Since an NP-hard combinatorial optimization problem must be solved for calculating the exact network design cost, we consider a game in which lower bounds obtained by Lagrangean relaxation are used instead of the exact costs. We derive a fair cost allocation for the game and show that the derived allocation vectors belong to the core.