Airport problem

In mathematics and especially game theory, the airport problem is a type of fair division problem in which it is decided how to distribute the cost of an airport runway among different players who need runways of different lengths. The problem was introduced by S. C. Littlechild and G. Owen in 1973.[1] Their proposed solution is:

Divide the cost of providing the minimum level of required facility for the smallest type of aircraft equally among the number of landings of all aircraft
Divide the incremental cost of providing the minimum level of required facility for the second smallest type of aircraft (above the cost of the smallest type) equally among the number of landings of all but the smallest type of aircraft. Continue thus until finally the incremental cost of the largest type of aircraft is divided equally among the number of landings made by the largest aircraft type.

The authors note that the resulting set of landing charges is the Shapley value for an appropriately defined game.

Example

An airport needs to build a runway for 4 different aircraft types. The building cost associated with each aircraft is 8, 11, 13, 18 for aircraft A, B, C, D. We would come up with the following cost table based on Shapley value:

Aircraft	Adding A	Adding B	Adding C	Adding D	Shapley value
Marginal Cost	8	3	2	5
Cost to A	2				2
Cost to B	2	1			3
Cost to C	2	1	1		4
Cost to D	2	1	1	5	9
Total					18

References

Littlechild, S. C.; Owen, G. (1973). "A Simple Expression for the Shapley Value in a Special Case". Management Science. 20 (3): 370–372. JSTOR 2629727.

Topics in game theory
Definitions	Cooperative game Determinacy Escalation of commitment Extensive-form game First-player and second-player win Game complexity Graphical game Hierarchy of beliefs Information set Normal-form game Preference Sequential game Simultaneous game Simultaneous action selection Solved game Succinct game
Equilibrium concepts	Nash equilibrium Subgame perfection Mertens-stable equilibrium Bayesian Nash equilibrium Perfect Bayesian equilibrium Trembling hand Proper equilibrium Epsilon-equilibrium Correlated equilibrium Sequential equilibrium Quasi-perfect equilibrium Evolutionarily stable strategy Risk dominance Core Shapley value Pareto efficiency Gibbs equilibrium Quantal response equilibrium Self-confirming equilibrium Strong Nash equilibrium Markov perfect equilibrium
Strategies	Dominant strategies Pure strategy Mixed strategy Strategy-stealing argument Tit for tat Grim trigger Collusion Backward induction Forward induction Markov strategy Bid shading
Classes of games	Symmetric game Perfect information Repeated game Signaling game Screening game Cheap talk Zero-sum game Mechanism design Bargaining problem Stochastic game Mean-field game n-player game Large Poisson game Nontransitive game Global game Strictly determined game Potential game
Games	Go Chess Infinite chess Checkers Tic-tac-toe Prisoner's dilemma Gift-exchange game Optional prisoner's dilemma Traveler's dilemma Coordination game Chicken Centipede game Volunteer's dilemma Dollar auction Battle of the sexes Stag hunt Matching pennies Ultimatum game Rock paper scissors Pirate game Dictator game Public goods game Blotto game War of attrition El Farol Bar problem Fair division Fair cake-cutting Cournot game Deadlock Diner's dilemma Guess 2/3 of the average Kuhn poker Nash bargaining game Induction puzzles Trust game Princess and Monster game Rendezvous problem
Theorems	Arrow's impossibility theorem Aumann's agreement theorem Folk theorem Minimax theorem Nash's theorem Purification theorem Revelation principle Zermelo's theorem
Key figures	Albert W. Tucker Amos Tversky Antoine Augustin Cournot Ariel Rubinstein Claude Shannon Daniel Kahneman David K. Levine David M. Kreps Donald B. Gillies Drew Fudenberg Eric Maskin Harold W. Kuhn Herbert Simon Hervé Moulin Jean Tirole Jean-François Mertens Jennifer Tour Chayes John Harsanyi John Maynard Smith John Nash John von Neumann Kenneth Arrow Kenneth Binmore Leonid Hurwicz Lloyd Shapley Melvin Dresher Merrill M. Flood Olga Bondareva Oskar Morgenstern Paul Milgrom Peyton Young Reinhard Selten Robert Axelrod Robert Aumann Robert B. Wilson Roger Myerson Samuel Bowles Suzanne Scotchmer Thomas Schelling William Vickrey
Miscellaneous	All-pay auction Alpha–beta pruning Bertrand paradox Bounded rationality Combinatorial game theory Confrontation analysis Coopetition Evolutionary game theory First-move advantage in chess Game mechanics Glossary of game theory List of game theorists List of games in game theory No-win situation Solving chess Topological game Tragedy of the commons Tyranny of small decisions

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