We characterize the sharing rule for which a contribution mechanism achieves efficiency in a cooperative production setting when agents are heterogeneous. This rule differs from the one obtained by Sen for the case of identical agents. We also show for a large class of sharing rules that if Nash equilibrium yields efficient allocations, the production function displays constant returns to scale, a case in which cooperation in production is useless. © 2008 Elsevier B.V. All rights reserved.
- Cooperative production