Cost Allocation in a Bank ATM Network

Abstract

We consider a situation in which a group of banks consider connecting their Automated TellerMachines (ATMs) in a network, so that the banks customers may use ATMs of any bank in the network.The problem studied is that of allocating the total transaction costs arising in the network, among the participating banks.The situation is modeled as a cooperative game with transferable utility. We propose two allocation rules, and discuss their relation to the core and other well-known solution concepts, as well as to population monotonicity.cost allocation;banks;networks;transaction costs