Assessment of the Conventional Cost Allocation Methods through Cost Structure in Multi-purpose Reservoir Development

Abstract

Although the theoretical framework to assess the applicability of conventional cost allocation methods in multi-purpose reservoir development has been proposed, how to assess it by the cost function obtained in a real development remains unknown. We show the relationship between the cost structure and cost game characteristics on which the applicability of cost allocation methods rely. In addition, we extend this analysis on supposition that the participant without its own volume is included in the development. By deriving the proto-type cost function, it is shown that the applicability of cost allocation methods can be assessed by the cost function.