We study the decentralized implementation of efficient outcomes through multilateral bargaining in the river sharing problem. We consider a class of mechanisms where agents first announce consumption levels and then bargain over monetary compensation. We first determine which mechanisms give incentives to always allocate the water efficiently. Among these, we take an axiomatic approach to single out three mechanisms that guarantee a fair division of the welfare gain.
In common agency games without budget constraints and outside option, Bernheim and Whinston (1986) show that CPNE=TNE=Principal-optimal core in the payoff space. With budget constraints or outside options, CPNE and TNE may not exist and may not be equivalent to each other. TNEs can be Pareto ranked, contrary to Dixit, Grossman, and Helpman (1996). CPNEs do not avoid a coordination problem, as they can be Pareto dominated by a TNE.
Severe and unidirectional threat of external invasion fostered political centralization in China. Europe faced a wider variety of smaller external threats and remained politically fragmented. Political centralization in China led to lower taxation and hence faster population growth during peacetime than in Europe. China was relatively fragile in the event of an external invasion.
Licensing technology to a rival firm when firms have heterogeneous technologies. If a third firm remains in the industry, licensing technology is profitable. Dependent on criteria, chosen licensees are different. Joint-profit- or welfare-maximization, or auction outcomes as a selection criterion.
Profit-maximizing matchmaker in the many-to-one assignment problem. Consider individualized and package price message spaces as firmsʼ strategy sets. Restricting message space improves resource allocation. Implementation of the stable correspondence in strong equilibrium.