Remarks on the proportional distribution in increasing return to scale problems

Camilla Di Luca (), Josep M Izquierdo () and Carles Rafels ()
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Camilla Di Luca: LUISS University
Josep M Izquierdo: University of Barcelona
Carles Rafels: Universitat de Barcelona

Economics Bulletin, 2013, vol. 33, issue 4, 2938-2947

Abstract: We study a cooperative problem where agents contribute a certain amount of input in order to obtain a surplus. We assume that the average surplus with respect to the amount contributed is increasing. Within this basic model, a cooperative game is associated and the proportional distribution arises as a natural core allocation. We describe a necessary and sufficient condition for which the core of the game shrinks to the proportional distribution. Furthermore, we characterize axiomatically the proportional distribution by means of three properties: core-selection, core-invariance and resource monotonicity. Finally, we provide a condition that guarantees that the proportional nucleolus coincides with the proportional solution.

Keywords: cooperative game; proportional distribution; core; nucleolus (search for similar items in EconPapers)
JEL-codes: C7 (search for similar items in EconPapers)
Date: 2013-12-23
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Citations: View citations in EconPapers (1)

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