THE ALLOCATION OF VALUE FOR JOINTLY PROVIDED SERVICES

Caller I.D. service, whereby the telephone number of the calling party is visually displayed to the called party during ringing, is now avai lable in some areas of the U.S., but it is restricted to calls within a local calling area, and for which the calling and called party are c ustomers of the same local telephone company. If Caller I.D. service i s extended nationwide, identification of a long-distance call will, in a typical case, require the participation of three companies: the loc al exchange carrier originating the call, the long-distance carrier, a nd the local exchange carrier terminating the call. How shall the reve nues from the service be divided among the participating firms? We app ly cooperative game theory to address this question.