Joint Production Games with Mixed Sharing Rules
AbstractWe study Nash equilibria of joint production games under a mixed output sharing rule in which part of the output (the mixing parameter) is shared in proportion to inputs and the rest according to exogenously determined shares. This rule includes proportional sharing and equal sharing as special cases. We show that this game has a unique equilibrium and discuss comparative statics. When the game is large, players unanimously prefer the same value of the mixing parameter: the equilibrium value of the elasticity of production. For this value, equilibrium input and output are fully efficient. Our approach exploits the fact that payoffs in the joint production game are a function only of a player's input and the aggregate input and has indepen-dent interest as it readily extends to other "aggregative games".
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Bibliographic InfoPaper provided by EconWPA in its series Game Theory and Information with number 0211003.
Length: 39 pages
Date of creation: 05 Nov 2002
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Note: Type of Document - pdf; prepared on pc; pages: 39
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Production externalities; non-cooperative games;
Other versions of this item:
- Richard Cornes & Roger Hartley, 2002. "Joint Production Games with Mixed Sharing Rules," Keele Economics Research Papers KERP 2002/16, Centre for Economic Research, Keele University.
- Hartley, Roger & Richard Cornes, 2003. "Joint Production Games with Mixed Sharing Rules," Royal Economic Society Annual Conference 2003 99, Royal Economic Society.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
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- R Cornes & R Hartley, 2005. "The Geometry of Aggregative Games," The School of Economics Discussion Paper Series 0514, Economics, The University of Manchester.
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