Abstract:
|
In many economic situations, individuals with different bargaining power
must agree on how to divide a given resource. For instance, in the dictator
game the proposer has all the bargaining power. In spite of it, the majority
of controlled experiments show that she shares an important amount of the
resource with the receiver. In the present paper I consider how behavioural
and psychological internal conflicting aspects, such as self-interest and equity
concerns, determine the split of the resource. The individual allocation proposals
are aggregated in terms of altruism and value for the resource under
dispute to obtain a single allocation. The resulting allocation rule is generalized
to the n-individuals case through eficiency and consistency. Finally, I
show that it satisfies a set of desirable properties. The obtained results are of
practical interest for a number of situations, such as river sharing problems,
sequential allocation and rationing problems.
Keywords: Behavioural operational research; Sharing rules; Altruism;
Equity concerns; Self-interest.
JEL classification: C91, D03, D63, D74. |