We offer an axiomatization of the serial cost-sharing method of Friedman and Moulin (1999). The key property in our axiom system is Group Demand Monotonicity, asking that when a group of agents raise their demands, not all of them should pay less.

Each agent in a finite set requests an integer quantity of an idiosyncratic good; the resulting total cost must be shared among the participating agents. The Aumann–Shapley prices are given by the Shapley value of the game where each unit of each good is regarded as a distinct player. The Aumann–Shapley cost-sharing method charges to an agent the sum of the prices attached to the units she consumes. We show that this method is characterized by the two standard axioms of Additivity and Dummy, and the property of No Merging or Splitting: agents never find it profitable to split or to merge their consumptions. We offer a variant of this result using the No Reshuffling condition: the total cost share paid by a group of agents who consume perfectly substitutable goods depends only on their aggregate consumption. We extend this characterization to the case where agents are allowed to consume bundles of goods.

A choice function is backwards-induction rationalizable if there exists a finite perfect-information extensive-form game such that for each subset of alternatives, the backwards-induction outcome of the restriction of the game to that subset of alternatives coincides with the choice from that subset. We prove that every choice function is backwards-induction rationalizable.

We study fairness in economies with one private good and one partially excludable nonrival good. A social ordering function determines for each profile of preferences an ordering of all conceivable allocations. We propose the following Free Lunch Aversion condition: if the private good contributions of two agents consuming the same quantity of the nonrival good have opposite signs, reducing that gap improves social welfare. This condition, combined with the more standard requirements of Unanimous Indifference and Responsiveness, delivers a form of welfare egalitarianism in which an agent's welfare is measured by the quantity of the nonrival good that, consumed at no cost, would leave her indifferent to the bundle she is assigned.