Cooperative Production and Efficiency

22 Pages Posted: 15 Nov 2015

See all articles by Carmen Bevia

Carmen Bevia

Universidad de Alicante

Luis C. Corchón

Universidad Carlos III de Madrid - Department of Economics

Date Written: July 1, 2008

Abstract

We characterize the sharing rule that achieves efficiency in a contribution mechanism when agents are heterogeneous. This rule is not the one that was found by Sen when agents are identical. We also show that for a large class of sharing rules if Nash equilibrium yields efficient allocations, there must be constant returns to scale in production, a case in which cooperation is useless.

Keywords: Sharing Rule, Cooperative production, Nash equilibrium

JEL Classification: C72, D71

Suggested Citation

Bevia, Carmen and Corchón Diaz, Luis Carlos, Cooperative Production and Efficiency (July 1, 2008). Available at SSRN: https://ssrn.com/abstract=2690333 or http://dx.doi.org/10.2139/ssrn.2690333

Carmen Bevia

Universidad de Alicante ( email )

Campus de San Vicente, sn
Alicante, 03690
Spain

Luis Carlos Corchón Diaz (Contact Author)

Universidad Carlos III de Madrid - Department of Economics ( email )

Calle Madrid 126
Getafe, 28903
Spain

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