Rotten Kid Transfers and Pareto Efficiency in Nonsymmetric Teams

Raul Fabella

No 199114, UP School of Economics Discussion Papers from University of the Philippines School of Economics

Abstract: We show that there is an exhaustive sharing scheme involving "rotten kid transfers" that allow Pareto efficiency in nonsymmetric teams where at least one member is team-spirited. The optimal "rotten kid transfers" from team-spirited members required to keep self-interested members from shirking are determined. If the affordability condition is satisfied, the optimal "rotten kid transfers" induce Pareto efficiency in teams.

Date: 1991-11
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Published as UPSE Discussion Paper No. 1991-14, November 1991

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Persistent link: https://EconPapers.repec.org/RePEc:phs:dpaper:199114

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