|
Archive@NYU >
Stern School of Business >
IOMS: Information Systems Working Papers >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/14280
|
| Title: | A Profit-Center Game With Incomplete Information |
| Authors: | lchiishi, Tatsuro
Radner, Roy |
| Keywords: | Firm in multidivisional form
Transfer payment problem
Incomplete information
Core plan
Full-information revealing core plan
Asset specificity |
| Issue Date: | Aug-1999 |
| Publisher: | Stern School of Business, New York University |
| Series/Report no.: | IS-99-05 |
| Abstract: | Profit centers in a firm in multidivisional form agree in the ex ante
stage upon a plan about their joint production and profit imputation.
The plan is executed in the subsequent two periods of the interim stage.
In the first interim period, each center has its private information,
but a part of its information is revealed to the other centers through
its action. Based on the information endogenously pooled this way, the
centers take another round of actions in the second interim period. A
core plan is defined as a Bayesian incentive-compatible plan of the
grand coalition of profit centers, upon which no coalition can improve
using its Bayesian incentive-compatible plan. A core plan is called
full-information revealing if each center fully reveals its private
information in the first period. Three existence theorems for a
full-information revealing core plan are established. The first two
theorems impose alternative conditions on returns to scale: (1) the
neoclassical convex technology, and (2) increasing returns to scale. In
case (2), a stronger condition than Scarf's distributiveness is imposed
on the total production set. The third theorem is based on a specific
supplier-customer relationship among the divisions. |
| URI: | http://hdl.handle.net/2451/14280 |
| Appears in Collections: | IOMS: Information Systems Working Papers
|
All items in Faculty Digital Archive are protected by copyright, with all rights reserved.
|
