Sharing the proceeds from a hierarchical venture
Jens Hougaard (),
Juan Moreno-Ternero (),
M. Tvede and
Lars Peter Østerdal
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M. Tvede: Newcastle University Business School
No 2015031, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)
We consider the problem of distributing the proceeds generated from a joint venture in which the participating agents are hierarchically organized. We introduce and characterize a family of allocation rules where revenue ‘bubbles up’ in the hierarchy. The family is flexible enough to accommodate a no-transfer rule (where no revenue bubbles up) and a full-transfer rule (where all the revenues bubble up to the top of the hierarchy). Intermediate rules within the family are reminiscent of popular incentive mechanisms for social mobilization. Our benchmark model refers to the case of linear hierarchies, but we also extend the analysis to the case in which hierarchies may convey a general tree structure and include joint ownerships.
Keywords: Hierarchies; Joint ventures; Resource allocation; Transfer rules; MIT strategy (search for similar items in EconPapers)
JEL-codes: C71 I10 (search for similar items in EconPapers)
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Journal Article: Sharing the proceeds from a hierarchical venture (2017)
Working Paper: Sharing the proceeds from a hierarchical venture (2017)
Working Paper: Sharing the proceeds from a hierarchical venture (2016)
Working Paper: Sharing the proceeds from a hierarchical venture (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2015031
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