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Cooperation by asymmetric agents in a joint project

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Author Info
Branzei, R.
Inarra, E.
Tijs, S.
Zarzuelo, J.M. (Tilburg University, Center for Economic Research)

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Abstract

The object of study is cooperation in joint projects, where agents may have different desired sophistication levels for the project, and where some of the agents may have low budgets. In this context questions concerning the optimal realizable sophistication level and the distribution of the related costs among the participants are tackled. A related cooperative game, the enterprise game, and a non-cooperative game, the contribution game, are both helpful. It turns out that there is an interesting relation between the core of the convex enterprise game and the set of strong Nash equilibria of the contribution game. Special attention is paid to a rule inspired by the airport landing fee literature. For this rule the project is split up in a sequence of subprojects where the involved participants pay amounts which are, roughly speaking, equal, but not more than their budgets allow. The resulting payoff distribution turns out to be a core element of the related contribution game.

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Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 15.

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Date of creation: 2002
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Handle: RePEc:dgr:kubcen:200215

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Moulin, Herve & Shenker, Scott, 1992. "Serial Cost Sharing," Econometrica, Econometric Society, vol. 60(5), pages 1009-37, September. [Downloadable!] (restricted)
  2. Potters, Jos & Sudholter, Peter, 1999. "Airport problems and consistent allocation rules," Mathematical Social Sciences, Elsevier, vol. 38(1), pages 83-102, July. [Downloadable!] (restricted)
  3. Young, H.P., 1994. "Cost allocation," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 34, pages 1193-1235 Elsevier. [Downloadable!] (restricted)
  4. Aadland, David & Kolpin, Van, 1998. "Shared irrigation costs: An empirical and axiomatic analysis," Mathematical Social Sciences, Elsevier, vol. 35(2), pages 203-218, March. [Downloadable!] (restricted)
  5. Moulin, Herve, 1994. "Serial Cost-Sharing of Excludable Public Goods," Review of Economic Studies, Blackwell Publishing, vol. 61(2), pages 305-25, April. [Downloadable!] (restricted)
  6. S.C. Littlechild & G.F. Thompson, 1977. "Aircraft Landing Fees: A Game Theory Approach," Bell Journal of Economics, The RAND Corporation, vol. 8(1), pages 186-204, Spring. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Tijs, S.H. & Branzei, R., 2004. "Cases in cooperation and cutting the cake," Discussion Paper 108, Tilburg University, Center for Economic Research. [Downloadable!]
  2. Branzei, R. & Inarra, E. & Tijs, S. & Zarzuelo, J.M., 2003. "An algorithm for the nucleolus of airport profit problems," Discussion Paper 50, Tilburg University, Center for Economic Research. [Downloadable!]
  3. Peter Borm & Herbert Hamers & Ruud Hendrickx, 2001. "Operations research games: A survey," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer, vol. 9(2), pages 139-199, December. [Downloadable!] (restricted)
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