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Coalitional efficient profit-sharing

Ruben Juarez, Kohei Nitta and Miguel Vargas

Economics Letters, 2021, vol. 204, issue C

Abstract: Agents invest their available time in projects that generate profit. A mechanism divides the profit generated between these agents, depending on their allocation of time and the total profit of every project. We study mechanisms that incentivize agents to contribute their time to a level that results in the maximal aggregate profit at the strong Nash equilibrium (coalitional efficiency). Our finding is the characterization of all mechanisms that satisfy coalitional efficiency. These mechanisms depends on the type of available projects, their interconnectedness and expand earlier mechanisms that are non-bossy.

Keywords: Strong Nash implementation; Profit-sharing; Efficiency; Non-bossy (search for similar items in EconPapers)
JEL-codes: C72 D44 D71 D82 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.econlet.2021.109875

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