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Sharing a common resource with concave benefits

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  • Ambec, S.

Abstract

A group of agents enjoy concave and single-peak benefit functions from consuming a shared resource. They also value money (transfers). The resource is scarce in the sense that not everybody can consume its peak. The paper characterizes the unique (resource and money) allocation that is efficient, incentive compatible and equal-sharing individual rational. It can be implemented (i) by selling the resource or taxing extraction and redistributing the money collected equally, or (ii) by assigning property rights on equal shares in a competitive market. Next, the paper posits an allocation that is incentive compatible, individual rational and assigns to every agent no more than its peak benefit.

Suggested Citation

  • Ambec, S., 2006. "Sharing a common resource with concave benefits," Working Papers 200601, Grenoble Applied Economics Laboratory (GAEL).
    • Handle: RePEc:gbl:wpaper:200601
    as

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    File URL: https://gael.univ-grenoble-alpes.fr/sites/default/files/Mediatheque/doc-recherche/WP/A2006/gael2006-03.pdf
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    References listed on IDEAS

    as
    1. Schmeidler, David & Vind, Karl, 1972. "Fair Net Trades," Econometrica, Econometric Society, vol. 40(4), pages 637-642, July.
      • SCHMEIDLER, David & VIND, Karl, 1972. "Fair net trades," LIDAM Reprints CORE 131, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. Ching, Stephen, 1992. "A simple characterization of the uniform rule," Economics Letters, Elsevier, vol. 40(1), pages 57-60, September.
    3. Sprumont, Yves, 1991. "The Division Problem with Single-Peaked Preferences: A Characterization of the Uniform Allocation Rule," Econometrica, Econometric Society, vol. 59(2), pages 509-519, March.
    4. Varian, Hal R., 1974. "Equity, envy, and efficiency," Journal of Economic Theory, Elsevier, vol. 9(1), pages 63-91, September.
    5. Moulin, Herve, 1991. "Welfare bounds in the fair division problem," Journal of Economic Theory, Elsevier, vol. 54(2), pages 321-337, August.
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    Citations

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    Cited by:

    1. d'Albis, Hippolyte & Ambec, Stefan, 2010. "Fair intergenerational sharing of a natural resource," Mathematical Social Sciences, Elsevier, vol. 59(2), pages 170-183, March.

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    More about this item

    Keywords

    COMMON RESOURCE; SINGLE PEAK; INCENTIVE COMPATIBLE; NO ENVY; FAIRNESS;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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