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Sharing the proceeds from a hierarchical venture

Author

Listed:
  • Jens Leth HOUGAARD
  • Juan D. MORENO-TERNERO
  • Mich TVEDE
  • Lars Peter OSTERDAL

Abstract

We consider the problem of distributing the proceeds generated from a joint venture in which the participating agents are hierarchically organized. We introduce and characterize a family of allocation rules where revenue ‘bubbles up’ in the hierarchy. The family is flexible enough to accommodate a no-transfer rule (where no revenue bubbles up) and a full-transfer rule (where all the revenues bubble up to the top of the hierarchy). Intermediate rules within the family are reminiscent of popular incentive mechanisms for social mobilization. Our benchmark model refers to the case of linear hierarchies, but we also extend the analysis to the case in which hierarchies may convey a general tree structure and include joint ownerships.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Jens Leth HOUGAARD & Juan D. MORENO-TERNERO & Mich TVEDE & Lars Peter OSTERDAL, 2017. "Sharing the proceeds from a hierarchical venture," LIDAM Reprints CORE 2828, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:2828
    Note: In : Games and Economic Behavior, 102, 98-110, 2017
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    Cited by:

    1. Yang, Yuzhi & Ansink, Erik & Gudmundsson, Jens, 2025. "How to pollute a river if you must," Journal of Environmental Economics and Management, Elsevier, vol. 130(C).
    2. Ruben Juarez & Michael Wu, 2019. "Routing-Proofness in Congestion-Prone Networks," Games, MDPI, vol. 10(2), pages 1-18, April.
    3. Juarez, Ruben & Ko, Chiu Yu & Xue, Jingyi, 2018. "Sharing sequential values in a network," Journal of Economic Theory, Elsevier, vol. 177(C), pages 734-779.
    4. Han, Lining & Juarez, Ruben, 2018. "Free intermediation in resource transmission," Games and Economic Behavior, Elsevier, vol. 111(C), pages 75-84.
    5. Jens Leth Hougaard & Juan D. Moreno-Ternero & Lars Peter Østerdal, 2022. "Optimal Management of Evolving Hierarchies," Management Science, INFORMS, vol. 68(8), pages 6024-6038, August.
    6. Ricardo Martinez & Juan D. Moreno-Ternero, 2024. "Fair allocation of riparian water rights," Papers 2407.14623, arXiv.org.
    7. Hao Wu & Rene van den Brink & Arantza Estevez-Fernandez, 2022. "The locally partial permission value for games with a permission structure," Tinbergen Institute Discussion Papers 22-037/II, Tinbergen Institute.
    8. Ricardo Martínez & Juan D. Moreno‐Ternero, 2024. "Redistribution with needs," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 26(1), February.
    9. Ruben Juarez & Kohei Nitta & Miguel Vargas, 2020. "Profit-sharing and efficient time allocation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 70(3), pages 817-846, October.
    10. Alcalde-Unzu, Jorge & Gallo, Oihane & Inarra, Elena & Moreno-Ternero, Juan D., 2024. "Solidarity to achieve stability," European Journal of Operational Research, Elsevier, vol. 315(1), pages 368-377.
    11. Jens Gudmundsson & Jens Leth Hougaard & Chiu Yu Ko, 2024. "Sharing Sequentially Triggered Losses: Automated Conflict Resolution Through Smart Contracts," Management Science, INFORMS, vol. 70(3), pages 1773-1786, March.
    12. Takayuki Oishi & Gerard van der Laan & René van den Brink, 2023. "Axiomatic analysis of liability problems with rooted-tree networks in tort law," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 75(1), pages 229-258, January.
    13. Juarez, Ruben & Nitta, Kohei & Vargas, Miguel, 2021. "Coalitional efficient profit-sharing," Economics Letters, Elsevier, vol. 204(C).
    14. Jens Gudmundsson & Jens Leth Hougaard & Juan D. Moreno-Ternero & Lars Peter {O}sterdal, 2023. "Successive Incentives," Papers 2311.12494, arXiv.org.
    15. Takaaki Abe & David Lowing & Satoshi Nakada & Kevin Techer, 2025. "The permission-Owen value: axiomatization and application to liability situations," International Journal of Game Theory, Springer;Game Theory Society, vol. 54(1), pages 1-29, June.
    16. Gudmundsson, Jens & Hougaard, Jens Leth & Ko, Chiu Yu, 2019. "Decentralized mechanisms for river sharing," Journal of Environmental Economics and Management, Elsevier, vol. 94(C), pages 67-81.
    17. Encarnacion Algaba & Rene van den Brink, 2021. "Networks, Communication and Hierarchy: Applications to Cooperative Games," Tinbergen Institute Discussion Papers 21-019/IV, Tinbergen Institute.
    18. Can, Burak & Leth Hougaard, Jens & Pourpouneh, Mohsen, 2022. "On reward sharing in blockchain mining pools," Games and Economic Behavior, Elsevier, vol. 136(C), pages 274-298.
    19. Jens Gudmundsson & Jens Leth Hougaard & Chiu Yu Ko, 2020. "Sharing sequentially triggered losses," IFRO Working Paper 2020/05, University of Copenhagen, Department of Food and Resource Economics.

    More about this item

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • I10 - Health, Education, and Welfare - - Health - - - General

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