Cost sharing: efficiency and implementation
نویسندگان
چکیده
We study environments where a production process is jointly shared by a finite group of agents. The social decision involves the determination of input contribution and output distribution. We define a competitive solution when there is decreasing-returns-to-scale which leads to a Pareto optimal outcome. Since there is a finite number of agents, the competitive solution is prone to manipulation. We construct a mechanism for which the set of Nash equilibria coincides with the set of competitive solution outcomes. We define a Ž . marginal-cost-pricing equilibrium MCPE solution for environments with increasing returns to scale. These solutions are Pareto optimal under certain conditions. We construct another mechanism that realizes the MCPE. q 1999 Elsevier Science S.A. All rights reserved. JEL classification: D51; D61; D78
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