Cooperative production and efficiency
We characterize the sharing rule for which a contribution mechanism achieves efficiency in a cooperative production setting when agents are heterogeneous. The sharing rule bears no resemblance to those considered by the previous literature. We also show for a large class of sharing rules that if Nash equilibrium yields efficient allocations, the production function displays constant returns to scale, a case in which cooperation in production is useless.
Year of publication: |
2007-04
|
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Authors: | Bevia, Carmen ; Corchon, Luis C. |
Institutions: | Departamento de EconomÃa, Universidad Carlos III de Madrid |
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