In freight industry, allocating the cost of empty miles of rail cars to partners in coalition is an important pricing problem. This paper proposes a game theory based cost allocation scheme that explicitly considers the level of participation and contribution in cooperation, the costs generated before and after cooperation, and the benefits obtained by each partner due to cooperation. Characterization of cost at each level of cooperation is considered based on the total empty miles generated or reduced through cooperation. Compared with other models, the proposed scheme consistently yields reasonable results even under the situation where the other models have performed poorly.
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