Fixed-path methods (FPMs) were introduced to manage situations where several individuals jointly operate a single technology (see [4]). In the production context, they consist in allocating marginal increments of output according to a proportions vector which changes along an arbitrary path. While very appealing from an incentives viewpoint under diminishing marginal returns, the asymmetry of these methods lacks solid economic interpretation. We provide such an interpretation by considering a situation where the technology to be shared results from the aggregation of private production processes. We propose a group-strategyproof mechanism under which no single agent wishes to secede from the partnership: the inverse marginal product proportions mechanism. It is the only FPM satisfying autarkic individual rationality; its path is uniquely determined by the technological contributions of the agents.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by HEC Montréal, Institut d'économie appliquée in its series Cahiers de recherche with number
06-10.
Length: 28 pages Date of creation: Oct 2006 Date of revision: Handle: RePEc:iea:carech:0610
Contact details of provider: Postal: Institut d'économie appliquée HEC Montréal 3000, Chemin de la Côte-Sainte-Catherine Montréal, Québec H3T 2A7 Phone: (514) 340-6463 Fax: (514) 340-6469 Email: Web page: http://www2.hec.ca/iea/ More information through EDIRC
Order Information: Postal: Institut d'économie appliquée HEC Montréal 3000, Chemin de la Côte-Sainte-Catherine Montréal, Québec H3T 2A7 Email:
For technical questions regarding this item, or to correct its listing, contact: (Patricia Power).
References listed on IDEAS 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.: