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Cooperation by Asymmetric Agents in a Joint Project

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  • R. BRANZEI
  • E. INARRA
  • S. TIJS
  • J. M. ZARZUELO

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 new rule inspired by the Baker-Thompson rule in 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 enterprise game. Copyright 2005 Blackwell Publishing Inc..

Suggested Citation

  • R. Branzei & E. Inarra & S. Tijs & J. M. Zarzuelo, 2005. "Cooperation by Asymmetric Agents in a Joint Project," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(4), pages 623-640, October.
  • Handle: RePEc:bla:jpbect:v:7:y:2005:i:4:p:623-640
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    References listed on IDEAS

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    3. 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.
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    Cited by:

    1. 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;Sociedad de Estadística e Investigación Operativa, vol. 9(2), pages 139-199, December.
    2. Tijs, S.H. & Brânzei, R., 2004. "Cases in Cooperation and Cutting the Cake," Discussion Paper 2004-108, Tilburg University, Center for Economic Research.
    3. Brânzei, R. & Inarra, E. & Tijs, S.H. & Zarzuelo, J., 2003. "An Algorithm for the Nucleolus of Airport Profit Problems," Discussion Paper 2003-50, Tilburg University, Center for Economic Research.
    4. Ryusuke Shinohara, 2014. "Participation and demand levels for a joint project," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(4), pages 925-952, December.

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