Assignment of Heterogeneous Agents in Trees under the Permission Value
We investigate assignment of heterogeneous agents in trees where the allocation rule is given by the permission value. We focus on efficient hierarchies,namely those, for which the payoff of the top agent is maximized. For additive games, such hierarchies are always cogent, namely, more productive agents occupy higher positions. The result can be extended to non-additive games with appropriate restrictions on the value function. Finally, we consider auctions where agents bid for positions in a two agent vertical hierarchy. Under simultaneous bidding, an equilibrium does not exist while sequential bidding always results in a non-cogent hierarchy.
|Date of creation:||27 Jul 2013|
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- Gilles, Robert P & Owen, Guillermo & van den Brink, Rene, 1992.
"Games with Permission Structures: The Conjunctive Approach,"
International Journal of Game Theory,
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- Gilles, R.P. & Owen, G. & van den Brink, J.R., 1991. "Games with permission structures : The conjunctive approach," Discussion Paper 1991-14, Tilburg University, Center for Economic Research.
- Gilles, R.P. & Owen, G. & van den Brink, J.R., 1991. "Games with permission structures : The conjunctive approach," Research Memorandum FEW 473, Tilburg University, School of Economics and Management.
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University of Chicago Press, vol. 89(5), pages 841-64, October.
- Oliver E. Williamson, 1967. "Hierarchical Control and Optimum Firm Size," Journal of Political Economy, University of Chicago Press, vol. 75, pages 123.
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