Fair Subsidies for Urban Transportation Systems

Abstract

Urban transportation systems are frequently subsidized by the governmental unit concerned. The problem of determining a fair rate of return for these systems is considered here from the point of view of the Shapley value (for non-atomic games). This allows us to obtain a “fair” rate of subsidy which can be made to depend on the particular route traveled, the number of passengers on the route, general frequency of service on that route, and physical condition of the cars used.