Sharing the Proceeds From a Hierarchical Venture

Jens Leth Hougaard, Juan D. Moreno-Ternero, Mich Tvede, Lars Peter Østerdal

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Abstrakt

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 the no-transfer rule (where no revenue bubbles up) and the 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 or multi-level marketing.
OriginalsprogEngelsk
TidsskriftGames and Economic Behavior
Vol/bind102
Sider (fra-til)98-110
Antal sider13
ISSN0899-8256
DOI
StatusUdgivet - mar. 2017

Emneord

  • Hierarchies
  • Joint ventures
  • Resource allocation
  • Geometric rules
  • MIT strategy

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