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Pooling Private Technologies: Improving upon Autarky

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  • Leroux, Justin

    (Rice U)

Abstract

When n agents decide to pool their private, decreasing returns technologies, single-path methods are a natural way to share joint output because of their strong incentives properties (Friedman, 2002). They are a non-anonymous generalization of the serial rule (Moulin and Shenker, 1992) sharing a production function along a prespecified path. We show that only one of these methods satisfies voluntary participation; its generating path is entirely determined by the n production functions. This yields a bijection between single-path methods and distributions of property rights on a single technology. Also, we show that these methods are characterized by their incentives properties in the 2-agent case, but not for n >= 3.

Suggested Citation

  • Leroux, Justin, 2004. "Pooling Private Technologies: Improving upon Autarky," Working Papers 2004-08, Rice University, Department of Economics.
  • Handle: RePEc:ecl:riceco:2004-08
    as

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    File URL: http://www.ruf.rice.edu/~econ/papers/2004papers/08leroux.pdf
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    References listed on IDEAS

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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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