Two versions of the tragedy of the commons

D62, D72, Externalities, Tragedy of the commons, Cost sharing, Surplus sharing, Average cost, Average return,

The allocation of value for jointly provided services

Caller I.D. service, whereby the telephone number of the calling party is visually displayed to the called party during ringing, is now available in some areas of the U.S., but it is restricted to calls within a local calling area, and for which the calling and called party are customers of the same local telephone company. If Caller I.D. service is extended nationwide, identification of a long-distance call will, in a typical case, require the participation of three companies: the local exchange carrier originating the call, the long-distance carrier, and the local exchange carrier terminating the call. How shall the revenues from the service be divided among the participating firms? We apply cooperative game theory to address this question