Sharing the proceeds from a hierarchical venture

TY - JOUR

T1 - Sharing the proceeds from a hierarchical venture

AU - Hougaard, Jens Leth

AU - Moreno-Ternero, Juan D.

AU - Tvede, Mich

AU - Østerdal, Lars Peter Raahave

PY - 2017/3/1

Y1 - 2017/3/1

N2 - 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.

AB - 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.

U2 - 10.1016/j.geb.2016.10.016

DO - 10.1016/j.geb.2016.10.016

M3 - Journal article

SN - 0899-8256

VL - 102

SP - 98

EP - 110

JO - Games and Economic Behavior

JF - Games and Economic Behavior

ER -