Asymmetrically fair rules for an indivisible good problem with a budget constraint

We study a particular restitution problem where there is an indivisible good (land or property) over which two agents have rights: the dispossessed agent and the owner. A third party, possibly the government, seeks to resolve the situation by assigning rights to one and compensate the other. There is also a maximum amount of money available for the compensation. We characterize a family of asymmetrically fair rules that are immune to strategic behavior, guarantee minimal welfare levels for the agents, and satisfy the budget constraint.     

Managing Stakeholder Involvement in Decision Making: A Comparative Analysis of Six Interactive Processes in the Netherlands

Initiatives to encourage and stimulate the involvement of citizensbut also various societal organizations in decision making canbe seen in a wide variety of European countries. Citizen panels,citizen charters, new types of participation, and other formsare being used to increase the influence of citizens on decisionmaking and to improve the relation between citizens and electedpoliticians. In the Netherlands a lot of local governments haveexperimented with interactive decision making that is enhancingthe influence of citizens and interest groups on public policymaking. The main motives to involve stakeholders in interactivedecision making are to diminish the veto power of various societalactors by involving them in decision making, improve the qualityof decision making by using the information and solutions ofvarious actors, and bridge the perceived growing cleavage betweencitizens and elected politicians. In this article six casesare evaluated. The cases are compared on three dimensions: thenature and organization of participation, the way the processis managed (process management), and the relation with formaldemocratic institutions. These organizational features (in termsof both formal organization and actual performance) are comparedwith the results of the decision-making processes in the sixcases. The article shows that the high expectations of interactivedecision making are not always met. It also shows that managingthe interactions—called process management in networktheory—is very important for achieving satisfactory outcomes.     

An algorithm for envy-free allocations in an economy with indivisible objects and money

This paper studies envy-free allocations for economies with indivisible objects, quasi-linear utility functions, and an amount of money. We give a polynomially bounded algorithm for finding envy-free allocations. Connectedness of envy-graphs, which are used in the algorithm, characterizes the extreme points of the polytopes of sidepayments corresponding with envy-free allocations. Received: 22 October 1997/Accepted: 19 January 1999     

Ex-post governance in joint ventures: Determinants of monitoring by JV boards of directors

Considerable advances have been made in corporate governance research in recent years and opportunities exist to consider these developments within alliances. We extend the “scope of operations” hypothesis to the domain of joint ventures. This proposition suggests that the monitoring carried out by boards increases when organizations become more complex. The inherent characteristics of JVs generate unique sources of complexity that are currently unexplored in the corporate governance literature. First, we seek to determine their influence on monitoring by using primary data on JV board monitoring. Second, we adopt the size of JV boards as a proxy for monitoring in order to examine whether the determinants of board size and monitoring in fact coincide and to reveal if certain effects are masked by using board size as a simple proxy for monitoring. Doing so enables us to investigate the black-box of what boards actually do as well as extend governance research to other organizational forms. Our findings confirm that the unique characteristics of JVs influence the information needs by the boards resulting in more monitoring by JV directors. Our findings show there is value in bridging alliance theory and the literature on corporate governance research. We also advance practitioner's understanding by providing suggestions on how to structure JV boards in relation to their complexity.     

Knowledge Accession and Knowledge Acquisition in Strategic Alliances: The Impact of Supplementary and Complementary Dimensions

This paper advances the concepts of knowledge accession and knowledge acquisition in strategic alliances by identifying supplementary and complementary dimensions to these knowledge transfer modes. Complementary knowledge transfer reflects the similarity of knowledge that the partners have and is conducted in pursuit of higher efficiency and productivity to enhance partner firms' existing competitiveness. Supplementary knowledge transfer occurs when partners each possess distinctive core competences and the information that is acquired or accessed increases the business scope of partners. As knowledge accession entails knowledge amalgamation that does not involve organizational learning, costs associated with the transfer process are lower and trust is easier to establish than in the case of knowledge acquisition. The paper reviews the implications of these transfer modes on trust building in alliances and their costs implications and presents a number of propositions for further exploration.     

On the exhaustiveness of truncation and dropping strategies in many-to-many matching markets

We consider two-sided many-to-many matching markets in which each worker may work for multiple firms and each firm may hire multiple workers. We study individual and group manipulations in centralized markets that employ (pairwise) stable mechanisms and that require participants to submit rank order lists of agents on the other side of the market. We are interested in simple preference manipulations that have been reported and studied in empirical and theoretical work: truncation strategies, which are the lists obtained by removing a tail of least preferred partners from a preference list, and the more general dropping strategies, which are the lists obtained by only removing partners from a preference list (i.e., no reshuffling). We study when truncation/dropping strategies are exhaustive for a group of agents on the same side of the market, i.e., when each match resulting from preference manipulations can be replicated or improved upon by some truncation/dropping strategies. We prove that for each stable mechanism, dropping strategies are exhaustive for each group of agents on the same side of the market (Theorem 1), i.e., independently of the quotas. Then, we show that for each stable mechanism, truncation strategies are exhaustive for each agent with quota 1 (Theorem 2). Finally, we show that this result cannot be extended neither to individual manipulations when the agent’s quota is larger than 1 (even when all other agents’ quotas equal 1—Example 1), nor to group manipulations (even when all quotas equal 1—Example 2).     

Smith and Rawls share a room: stability and medians

We consider one-to-one, one-sided matching (roommate) problems in which agents can either be matched as pairs or remain single. We introduce a so-called bi-choice graph for each pair of stable matchings and characterize its structure. Exploiting this structure we obtain as a corollary the “lone wolf” theorem and a decomposability result. The latter result together with transitivity of blocking leads to an elementary proof of the so-called stable median matching theorem, showing how the often incompatible concepts of stability (represented by the political economist Adam Smith) and fairness (represented by the political philosopher John Rawls) can be reconciled for roommate problems. Finally, we extend our results to two-sided matching problems.     

Manipulability in matching markets: conflict and coincidence of interests

We study comparative statics of manipulations by women in the men-proposing deferred acceptance mechanism in the two-sided one-to-one marriage market. We prove that if a group of women weakly successfully manipulates or employs truncation strategies, then all other women weakly benefit and all men are weakly harmed. We show that these results do not appropriately generalize to the many-to-one college admissions model.     

Outsourcing with identical suppliers and shortest-first policy: a laboratory experiment

We study experimentally in the laboratory two 2-player games that mimic a decentralized decision-making situation in which firms repeatedly outsource production orders to multiple identical suppliers. The first game has a unique (inefficient) equilibrium in mixed strategies, while the second game has two (efficient) equilibria in pure strategies and an infinite number of (inefficient) equilibria in mixed strategies. In both games, the optimal social costs can also be obtained via dominated strategies. We find that only in the second game subjects manage to reach an efficient outcome more often when matched in fixed pairs than when randomly rematched each round. Surprisingly, this is because subjects coordinate on dominated strategies (and not an efficient pure strategy equilibrium). We show theoretically that preferences for efficiency cannot explain our experimental results. Inequality aversion, on the other hand, cannot be rejected.