IDEAS home Printed from
   My bibliography  Save this article

Shirking and Squandering in Sharing Games


  • Courtney Dennis

    () (University of California, Berkeley)

  • Marschak Thomas

    () (University of California, Berkeley)


In a sharing game the players' choices yield a revenue, each player's choice carries a cost, and a player's payoff is a portion of the revenue minus the player's cost. Such games are appealingly simple devices for partially aligning individual incentives with organizational goals, but their equilibria may be inefficient, i.e., at an equilibrium the surplus (revenue minus the sum of the costs) may not be maximal. Sharing games as a general class have not been well studied. We start a general theory of sharing games by going beyond the common economic setting, where strategy sets are continua and cost and revenue functions are smooth. We include games in which some of a player's strategies are equally costly, and revenue changes when he switches from one of them to another. We consider several large classes of reward functions, including nondecreasing residual (NDR) functions, in which residual (revenue minus rewards) does not drop when revenue increases. That class includes budget-balancing functions, where residual is always zero. To focus the discussion, we examine a “Folk Claim", which asserts that at every inefficient equilibrium shirking, in some sense, occurs. We show that in NDR games a complementarity condition indeed insures that no one squanders at equilibrium (spends more than at an efficient profile). But when we drop complementarity, the situation changes sharply, and there are games with compelling equilibria, at which some players squander. The shirking/squandering distinction is particularly important in tracing the effect of technical improvement on the surplus shortfall at a sharing game's equilibrium. The paper also obtains conditions for existence of (pure-strategy) equilibria and finds, in particular, that every finite game in which rewards are linearly related has an equilibrium.

Suggested Citation

  • Courtney Dennis & Marschak Thomas, 2006. "Shirking and Squandering in Sharing Games," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 6(1), pages 1-34, December.
  • Handle: RePEc:bpj:bejtec:v:topics.6:y:2006:i:1:n:21

    Download full text from publisher

    File URL:
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    As the access to this document is restricted, you may want to search for a different version of it.


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Bogumił Kamiński & Maciej Łatek, 2010. "Tradeoff between Equity and Effciency in Revenue Sharing Contracts," Central European Journal of Economic Modelling and Econometrics, CEJEME, vol. 2(1), pages 1-16, January.
    2. Dennis Courtney & Thomas Marschak, 2009. "Inefficiency and complementarity in sharing games," Review of Economic Design, Springer;Society for Economic Design, vol. 13(1), pages 7-43, April.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejtec:v:topics.6:y:2006:i:1:n:21. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.