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Cooperative Production and Efficiency

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Abstract

We characterize the sharing rule for which a contribution mechanism achieves efficiency in a cooperative production setting when agents are heterogeneous. The sharing rule bears no resemblance to those considered by the previous literature. We also show for a large class of sharing rules that if Nash equilibrium yields efficient allocations, the production function displays constant returns to scale, a case in which cooperation in production is useless.

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  • Carmen Beviá & Luis C. Corchón, 2007. "Cooperative Production and Efficiency," UFAE and IAE Working Papers 696.07, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    • Handle: RePEc:aub:autbar:696.07
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    Cited by:

    1. Beviá, Carmen & Corchón, Luis C., 2017. "Growth in Illyria: The role of meritocracy in the accumulation of human capital," Mathematical Social Sciences, Elsevier, vol. 90(C), pages 182-190.

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    More about this item

    Keywords

    Cooperative Production; sharing rules; efficiency;
    All these keywords.

    JEL classification:

    • D29 - Microeconomics - - Production and Organizations - - - Other
    • D6 - Microeconomics - - Welfare Economics
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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