A further note on the nucleoous of the “airport game.pdfVIP

Int. Journal of Game Theory, Vol. 5, Issue 2]3, 95. Physica-Verlag, Henna. A F u r t h e r N o t e o n t h e N u c | e o o u s o f t h e A i r p o r t G a m e By S.C Littlechild, Birmingham I ), and G. Owen, Paris 2 ) Abstract: This paper represents a generalization of a previous paper on an airport cost game to the case of an airport profit game. A fee schedule in the airport profit game is obtained by sub- tracting the payoff vector from the vector of revenues. It is proved that the fee schedule corre- sponding to the nucleolus is independent of the revenue vector. 1. Introduction A previous paper in this journal (Littlechild, 1974) introduced an airport cost game based upon Birmingham airporL in which the set of players comprised move- ments (take.offs and landings) by different types of aircraft and the characteristic function was given by (the negative of) the airport runway construction cost function. The latter has the property that the capital cost of a runway depends upon the largest aircraft type for which the runway is designed. A pay-off vector corresponds to (the negative o 0 a schedule of movement fees. Because of the special structure of the game, it was possible to derive an extremely sinlple algorithm for computing the nucleolus. In fact, the cumulative nucleolus is a close approx~nation to the convex envelope of the airport runway construction cost function. Consequently, the fee schedule corre- sponding to the nucleolus involves the fee charged to each aircraft type being as low as possible, consistent with a) larger aircraft being