Allocation rules for a commonly owned technology: the average cost lower bound
(1996) Journal of Economic Theory — Vol. 69, n° 2, p. 490-507 (1996)
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- Assume that a set of individuals commonly own a one input–one output technology. At an average cost pricing equilibrium allocation, the consumption/contribution ratio is identical among agents and each agent maximizes her welfare given this ratio. The following requirement is introduced: every agent must be as well off at a selected allocation as at the average cost equilibrium that all agents prefer. The paper establishes compatibilities and incompatibilities between this requirement and some traditional requirements. Finally, the new lower bound is combined with properties such as technological monotonicity or contraction independence to characterize Mas-Colell's constant returns equivalent allocation rule.
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Maniquet, F. (1996). Allocation rules for a commonly owned technology: the average cost lower bound. Journal of Economic Theory, 69(2), 490-507. https://doi.org/10.1006/jeth.1996.0065 (Original work published 1996)