Pooling Private Technologies: Improving upon Autarky

Justin Leroux

Working Papers from Rice University, Department of Economics

Abstract: When n agents decide to pool their private, decreasing returns technologies, single-path methods are a natural way to share joint output because of their strong incentives properties (Friedman, 2002). They are a non-anonymous generalization of the serial rule (Moulin and Shenker, 1992) sharing a production function along a prespecified path. We show that only one of these methods satisfies voluntary participation; its generating path is entirely determined by the n production functions. This yields a bijection between single-path methods and distributions of property rights on a single technology. Also, we show that these methods are characterized by their incentives properties in the 2-agent case, but not for n >= 3.

JEL-codes: C72 (search for similar items in EconPapers)
Date: 2004-01
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:riceco:2004-08

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