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Full-Text Articles in Social and Behavioral Sciences
A Relational Contract For Water Demand Management, R K Amit, Parthasarathy Ramachandran
A Relational Contract For Water Demand Management, R K Amit, Parthasarathy Ramachandran
R K Amit
For necessary goods like water, under supply constraints, fairness considerations lead to negative externalities. The objective of this paper is to design an infinite horizon contract or relational contract (a type of long-term contract) that ensures self-enforcing (instead of court-enforced) behaviour by the agents to mitigate the externality due to fairness issues. In this contract, the consumer is induced to consume at firm-supply level using the threat of higher fair price for future time periods. The pricing mechanism, computed in this paper, internalizes the externality and is shown to be economically efficient and provides revenue sufficiency.
Aspects Of Exchangeability In The Shapley Value, R K. Amit, Parthasarathy Ramachandran
Aspects Of Exchangeability In The Shapley Value, R K. Amit, Parthasarathy Ramachandran
R K Amit
This paper characterizes the aspects of exchangeability in the Shapley value. We show that, in the Shapley value, each player’s prospects of joining a t-player game as the last member of the game is a moment sequence of the uniform distribution. We prove that, with finite exchangeability, the Shapley value is the only value in which the probability assignment is a unique mixture of independent and identically distributed probabilities. We also derive the Shapley value using the de Finetti’s theorem.