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Sharing a common resource with concave benefits

Stefan Ambec

Working Papers from Grenoble Applied Economics Laboratory (GAEL)

Abstract: A group of agents enjoy concave and single-peak benefit functions from consuming a shared resource. They also value money (transfers). The resource is scarce in the sense that not everybody can consume its peak. The paper characterizes the unique (resource and money) allocation that is efficient, incentive compatible and equal-sharing individual rational. It can be implemented (i) by selling the resource or taxing extraction and redistributing the money collected equally, or (ii) by assigning property rights on equal shares in a competitive market. Next, the paper posits an allocation that is incentive compatible, individual rational and assigns to every agent no more than its peak benefit.

Keywords: COMMON RESOURCE; SINGLE PEAK; INCENTIVE COMPATIBLE; NO ENVY; FAIRNESS (search for similar items in EconPapers)
JEL-codes: D63 Q20 (search for similar items in EconPapers)
Date: 2006
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