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Cost Sharing : Efficiency and Implementation

Author

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  • Kaplan, T-R
  • Wettstein, D

Abstract

We study environments where a production process is jointly shared by a finite group of agents. The social decision involves the determination of input contribution and output distribution. We define a competitive solution when there is decreasing returns-to-scale and show that it leads to a Pareto optimal outcome.

Suggested Citation

  • Kaplan, T-R & Wettstein, D, 1996. "Cost Sharing : Efficiency and Implementation," Papers 44-96, Tel Aviv.
    • Handle: RePEc:fth:teavfo:44-96
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    References listed on IDEAS

    as
    1. Moore, John & Repullo, Rafael, 1988. "Subgame Perfect Implementation," Econometrica, Econometric Society, vol. 56(5), pages 1191-1220, September.
    2. Matsushima, Hitoshi, 1988. "A new approach to the implementation problem," Journal of Economic Theory, Elsevier, vol. 45(1), pages 128-144, June.
    3. Schmeidler, David, 1980. "Walrasian Analysis via Strategic Outcome Functions," Econometrica, Econometric Society, vol. 48(7), pages 1585-1593, November.
    4. Egbert Dierker, 1986. "When does marginal cost pricing lead to Pareto efficiency?," Journal of Economics, Springer, vol. 46(1), pages 41-66, December.
    5. Hong, Lu, 1995. "Nash Implementation in Production Economies," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 5(3), pages 401-417, May.
    6. Bonnisseau, Jean-Marc & Cornet, Bernard, 1990. "Existence of Marginal Cost Pricing Equilibria in Economies with Several Nonconvex Firms," Econometrica, Econometric Society, vol. 58(3), pages 661-682, May.
    7. CORNET, Bernard, 1988. "Marginal cost pricing and Pareto optimality," LIDAM Discussion Papers CORE 1988037, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    8. Abreu, Dilip & Sen, Arunava, 1991. "Virtual Implementation in Nash Equilibrium," Econometrica, Econometric Society, vol. 59(4), pages 997-1021, July.
    9. Paulina Beato, 1982. "The Existence of Marginal Cost Pricing Equilibria with Increasing Returns," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 97(4), pages 669-688.
    10. L. Hurwicz, 1979. "Outcome Functions Yielding Walrasian and Lindahl Allocations at Nash Equilibrium Points," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 46(2), pages 217-225.
    11. Moulin, Herve & Shenker, Scott, 1992. "Serial Cost Sharing," Econometrica, Econometric Society, vol. 60(5), pages 1009-1037, September.
    12. Calsamiglia, Xavier, 1977. "Decentralized resource allocation and increasing returns," Journal of Economic Theory, Elsevier, vol. 14(2), pages 263-283, April.
    13. Palfrey, Thomas R & Srivastava, Sanjay, 1991. "Nash Implementation Using Undominated Strategies," Econometrica, Econometric Society, vol. 59(2), pages 479-501, March.
    14. Kamiya, Kazuya, 1988. "Existence and uniqueness of equilibria with increasing returns," Journal of Mathematical Economics, Elsevier, vol. 17(2-3), pages 149-178, April.
    15. Young, H.P., 1994. "Cost allocation," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 34, pages 1193-1235, Elsevier.
    16. Abreu, Dilip & Sen, Arunava, 1990. "Subgame perfect implementation: A necessary and almost sufficient condition," Journal of Economic Theory, Elsevier, vol. 50(2), pages 285-299, April.
    17. Varian, Hal R, 1994. "A Solution to the Problem of Externalities When Agents Are Well-Informed," American Economic Review, American Economic Association, vol. 84(5), pages 1278-1293, December.
    18. Kamiya, Kazuya, 1988. "On the survival assumption in marginal (cost) pricing," Journal of Mathematical Economics, Elsevier, vol. 17(2-3), pages 261-273, April.
    19. Andrew Postlewaite & David Wettstein, 1989. "Feasible and Continuous Implementation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 56(4), pages 603-611.
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    Cited by:

    1. Ding Lu, 2001. "Shared network investment," Journal of Economics, Springer, vol. 73(3), pages 299-312, October.

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    More about this item

    Keywords

    ECONOMIC MODELS ; ECONOMIC EQUILIBRIUM ; PRODUCTION ; DECISION MAKING;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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