Lookup NU author(s): Professor Mich Tvede
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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.
Author(s): Hougaard JL, Moreno-Ternero JD, Tvede M, Østerdal LP
Publication type: Article
Publication status: Published
Journal: Games and Economic Behavior
Print publication date: 01/03/2017
Online publication date: 17/11/2016
Acceptance date: 17/11/2016
Date deposited: 03/01/2017
ISSN (print): 0899-8256
ISSN (electronic): 1090-2473
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