Cost Allocation in Joint Replacement for Multi-State Deteriorating Systems

We study the problem concerning the allocation of cost incurred by owners of deteriorating systems. The cost allocation mechanism is designed using a dynamic cooperative game of joint replacement of the systems. Analyzing the game, it is found to be characterized by the instantaneous cost saving function. We suggest that the cost allocation method must satisfy several axioms such as additivity and dummy in this context. As a result, the class of additive cost methods such as Shapley value is useful. However, each method in this class has different disadvantage