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Sharing Sequential Values in a Network

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  • Juarez, Ruben

    (Department of Economics, University of Hawaii)

  • Ko, Chiu Yu

    (Department of Economics, National University of Singapore)

  • Xue, Jingyi

    (School of Economics, Singapore Management University)

Abstract

Consider a sequential process where agents have individual values at every possible step. A planner is in charge of selecting steps and distributing the accumulated aggregate values among agents. We model this process by a directed network where each edge is associated with a vector of individual values. This model applies to several new and existing problems, e.g., developing a connected public facility and distributing total values received by surrounding districts; selecting a long-term production plan and sharing final profits among partners of a firm; choosing a machine schedule to serve different tasks and distributing total outputs among task owners. Herein, we provide the first axiomatic study on path selection and value sharing in networks. We consider four sets of axioms from different perspectives, including those related to (1) the sequential consistency of assignments with respect to network decompositions; (2) the monotonicity of assignments with respect to network expansion; (3) the independence of assignments with respect to certain network transformations; and (4) implementation in the case where the planner has no information about the underlying network and individual values. Surprisingly, these four disparate sets of axioms characterize similar classes of solutions — selecting efficient path(s) and assigning to each agent a share of total values which is independent of their individual values. Furthermore, we characterize more general solutions that depend on individual values.

Suggested Citation

  • Juarez, Ruben & Ko, Chiu Yu & Xue, Jingyi, 2016. "Sharing Sequential Values in a Network," Economics and Statistics Working Papers 3-2017, Singapore Management University, School of Economics.
  • Handle: RePEc:ris:smuesw:2017_003
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    1. Ruben Juarez & Michael Wu, 2019. "Routing-Proofness in Congestion-Prone Networks," Games, MDPI, Open Access Journal, vol. 10(2), pages 1-18, April.
    2. Jung S. You & Ruben Juarez, 2021. "Incentive-compatible simple mechanisms," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(4), pages 1569-1589, June.
    3. Juarez, Ruben & Nitta, Kohei & Vargas, Miguel, 2021. "Coalitional efficient profit-sharing," Economics Letters, Elsevier, vol. 204(C).
    4. Jens Leth, Hougaard & Juan D., Moreno-Ternero & Lars Peter, Østerdal, 2018. "Optimal Management of Evolving Hierarchies," Working Papers 11-2018, Copenhagen Business School, Department of Economics.
    5. 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.

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    More about this item

    Keywords

    Sequential Values; Sharing; Network; Redistribution;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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