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Non-Parametric Tests of Output- and Cost-Sharing Games

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  • Banzhaf, H. Spencer
  • Liu, Yaqin

Abstract

The “tragedy of the commons” describes a variety of social dilemmas where total economic sur- plus is produced jointly from collective behavior and where individuals can strategically manipu- late their share of the surplus. Recent research has shown that it is possible to test nonparametri- cally whether observed behavioral data are consistent with the canonical average return game, in which players share joint output in proportion to their inputs. We show that these tests extend to a much broader range of games, including equal-sharing of joint output, weighted averages of equal-sharing and proportionate sharing, and the average cost game, in which players share joint costs in proportion to the service provided them.

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Handle: RePEc:ags:cenrep:347604
DOI: 10.22004/ag.econ.347604
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