European Business Schools Librarian's Group
Working Papers,
Copenhagen Business School, Department of Economics
No 17-2024: Rationalizing Sharing Rules
Karol Flores-Szwagrzak () and Lars Peter Østerdal ()
Additional contact information
Karol Flores-Szwagrzak: Department of Economics, Copenhagen Business School, Postal: Copenhagen Business School, Department of Economics, Porcelaenshaven 16 A. 1. floor, DK-2000 Frederiksberg, Denmark
Lars Peter Østerdal: Department of Economics, Copenhagen Business School, Postal: Copenhagen Business School, Department of Economics, Porcelaenshaven 16 A. 1. floor, DK-2000 Frederiksberg, Denmark
Abstract: A partnership can yield a return—a loss or a profit relative to the partners’ investments. How should the partners share the return? We identify the shar-ing rules satisfying classical properties (symmetry, consistency, and continuity) and avoiding arbitrary bounds on a partner’s share. We show that any such rule can be rationalized in the sense that its recommendations are aligned with those maximizing a separable welfare function. Among these rules, we charac-terize those formalizing different notions of proportionality and, in particular, a convenient subclass specified by a single inequality aversion parameter. We also explore when a rule can be rationalized by a more general welfare function. Our central results extend to a wider class of resource allocation problems.
Keywords: Sharing; Consistency; Axioms; Welfare maximization
Language: English
36 pages, November 11, 2024
Full text files
ef76c792-466d-4af7-9eeb-7d111ca60de2Full text
- Copenhagen Business School, Department of Economics
- Ordering Working Papers
- Home page for this series
Questions (including download problems) about the papers in this series should be directed to Lars Nondal ()
Report other problems with accessing this service to Sune Karlsson ().
RePEc:hhs:cbsnow:2024_017This page generated on 2024-12-21 04:36:15.