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Joint Production Games with Mixed Sharing Rules

Author

Listed:
  • Richard Cornes

    (Nottingham University)

  • Roger Hartley

    (Keele University)

Abstract

We study Nash equilibria of joint production games under a mixed output sharing rule in which part of the output (the mixing parameter) is shared in proportion to inputs and the rest according to exogenously determined shares. This rule includes proportional sharing and equal sharing as special cases. We show that this game has a unique equilibrium and discuss comparative statics. When the game is large, players unanimously prefer the same value of the mixing parameter: the equilibrium value of the elasticity of production. For this value, equilibrium input and output are fully efficient. Our approach exploits the fact that payoffs in the joint production game are a function only of a player's input and the aggregate input and has indepen-dent interest as it readily extends to other "aggregative games".

Suggested Citation

  • Richard Cornes & Roger Hartley, 2002. "Joint Production Games with Mixed Sharing Rules," Game Theory and Information 0211003, EconWPA.
  • Handle: RePEc:wpa:wuwpga:0211003
    Note: Type of Document - pdf; prepared on pc; pages: 39
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    File URL: http://econwpa.repec.org/eps/game/papers/0211/0211003.pdf
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    Cited by:

    1. repec:wsi:igtrxx:v:17:y:2015:i:01:n:s021919891540006x is not listed on IDEAS
    2. A. Dickson & R. Hartley, 2005. "The strategic Marshallian cross and bilateral oligopoly," The School of Economics Discussion Paper Series 0523, Economics, The University of Manchester.
    3. Cornes, Richard & Hartley, Roger, 2012. "Fully aggregative games," Economics Letters, Elsevier, vol. 116(3), pages 631-633.
    4. Dickson, Alex & Hartley, Roger, 2008. "The strategic Marshallian cross," Games and Economic Behavior, Elsevier, vol. 64(2), pages 514-532, November.
    5. R Cornes & R Hartley, 2005. "The Geometry of Aggregative Games," The School of Economics Discussion Paper Series 0514, Economics, The University of Manchester.

    More about this item

    Keywords

    Production externalities; non-cooperative games;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

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