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Remarks on the proportional distribution in increasing return to scale problems

Author

Listed:
  • Camilla Di Luca

    (LUISS University)

  • Josep M Izquierdo

    (University of Barcelona)

  • Carles Rafels

    (Universitat de Barcelona)

Abstract

We study a cooperative problem where agents contribute a certain amount of input in order to obtain a surplus. We assume that the average surplus with respect to the amount contributed is increasing. Within this basic model, a cooperative game is associated and the proportional distribution arises as a natural core allocation. We describe a necessary and sufficient condition for which the core of the game shrinks to the proportional distribution. Furthermore, we characterize axiomatically the proportional distribution by means of three properties: core-selection, core-invariance and resource monotonicity. Finally, we provide a condition that guarantees that the proportional nucleolus coincides with the proportional solution.

Suggested Citation

  • Camilla Di Luca & Josep M Izquierdo & Carles Rafels, 2013. "Remarks on the proportional distribution in increasing return to scale problems," Economics Bulletin, AccessEcon, vol. 33(4), pages 2938-2947.
    • Handle: RePEc:ebl:ecbull:eb-13-00444
    as

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    References listed on IDEAS

    as
    1. Mas-Colell, Andreu, 1989. "An equivalence theorem for a bargaining set," Journal of Mathematical Economics, Elsevier, vol. 18(2), pages 129-139, April.
    2. K. J. Arrow & A. K. Sen & K. Suzumura (ed.), 2002. "Handbook of Social Choice and Welfare," Handbook of Social Choice and Welfare, Elsevier, edition 1, volume 1, number 1.
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    Cited by:

    1. Josep Maria Izquierdo & Carlos Rafels, 2020. "Core Allocations in Co-investment Problems," Group Decision and Negotiation, Springer, vol. 29(6), pages 1157-1180, December.

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    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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