Joint Production Games with Mixed Sharing Rules

Richard Cornes and Roger Hartley

Game Theory and Information from EconWPA

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".

Keywords: Production externalities; non-cooperative games (search for similar items in EconPapers)
JEL-codes: C72 H42 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe
Date: 2002-11-05
Note: Type of Document - pdf; prepared on pc; pages: 39
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Related works:
Working Paper: Joint Production Games with Mixed Sharing Rules (2002)
Working Paper: Joint Production Games with Mixed Sharing Rules (2003)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpga:0211003

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