IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Salience and Cooperation Among Rational Egoists

Listed author(s):
  • Raul V. Fabella

    (School of Economics, University of the Philippines Diliman)

Registered author(s):

    We give the conditions for the attainment of self-enforcing Pareto efficiency under complete effort non-observability, strict agent rationality and global budget balance among teams involved in a winner-takes-all contest for a prize. Employing Nash conjectures and fixed fee financing of the prize, we characterize the competitive environment that allows teams to overcome the moral hazard problem and induce self-enforcing egalitarian outcomes. If the number of identical teams is finite, the production technology is restricted to factor symmetric ones. When the number of identical teams becomes unbounded, the restriction on the production technology vanishes and there always exists a fee level that supports a self-enforcing Pareto efficient solution as long as member utilities over own share are identical and obey the Inada conditions. Some form of membership symmetry cannot be ruled out for Pareto efficiency.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/712/185
    Download Restriction: no

    Paper provided by University of the Philippines School of Economics in its series UP School of Economics Discussion Papers with number 201309.

    as
    in new window

    Length: 9 pages
    Date of creation: Jul 2013
    Publication status: Published as UPSE Discussion Paper No. 2013-09, July 2013
    Handle: RePEc:phs:dpaper:201309
    Contact details of provider: Postal:
    Diliman, Quezon City 1101

    Phone: 927-9686
    Web page: http://www.econ.upd.edu.ph/

    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as
    in new window


    1. Amartya K. Sen, 1966. "Labour Allocation in a Cooperative Enterprise," Review of Economic Studies, Oxford University Press, vol. 33(4), pages 361-371.
    2. Rowthorn, Robert E. & Guzmán, Ricardo Andrés & Rodríguez-Sickert, Carlos, 2009. "Theories of the evolution of cooperative behaviour: A critical survey plus some new results," MPRA Paper 12574, University Library of Munich, Germany.
    3. Fabella, Raul V., 1988. "Natural team sharing and team productivity," Economics Letters, Elsevier, vol. 27(2), pages 105-110.
    4. Guttman, Joel M & Schnytzer, Adi, 1989. "Strategic Work Interactions and the Kibbutz-Kolkhoz Paradox," Economic Journal, Royal Economic Society, vol. 99(397), pages 686-699, September.
    5. Roy Radner, 1986. "Repeated Partnership Games with Imperfect Monitoring and No Discounting," Review of Economic Studies, Oxford University Press, vol. 53(1), pages 43-57.
    6. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn.
    7. Jack Hirshleifer, 1989. "Conflict and rent-seeking success functions: Ratio vs. difference models of relative success," Public Choice, Springer, vol. 63(2), pages 101-112, November.
    8. Ma, Ching-to & Moore, John & Turnbull, Stephen, 1988. "Stopping agents from "cheating"," Journal of Economic Theory, Elsevier, vol. 46(2), pages 355-372, December.
    9. Valsecchi, Irene, 1996. "Policing Team Production through Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 12(2), pages 361-375, October.
    10. Amsden, Alice H. & Singh, Ajit, 1994. "The optimal degree of competition and dynamic efficiency in Japan and Korea," European Economic Review, Elsevier, vol. 38(3-4), pages 941-951, April.
    11. Leonid Hurwicz, 1994. "Economic design, adjustment processes, mechanisms, and institutions," Review of Economic Design, Springer;Society for Economic Design, vol. 1(1), pages 1-14, December.
    12. Farrell, Joseph & Lander, Eric, 1989. "Competition between and within teams : The Lifeboat Principle," Economics Letters, Elsevier, vol. 29(3), pages 205-208.
    13. Ching-To Ma, 1988. "Unique Implementation of Incentive Contracts with Many Agents," Review of Economic Studies, Oxford University Press, vol. 55(4), pages 555-572.
    14. Macleod, W.B., 1984. "A theory of cooperative teams," CORE Discussion Papers 1984041, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    15. Eric Rasmusen, 1987. "Moral Hazard in Risk-Averse Teams," RAND Journal of Economics, The RAND Corporation, vol. 18(3), pages 428-435, Autumn.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:phs:dpaper:201309. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Reuben T. Campos)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.