Compensating Losses and Sharing Surpluses in Project-Allocation Situations

By introducing the notions of projects and shares, this paper studies a class of economic environments, the so-called project-allocation situations, in which society may profit from cooperation, i.e., by reallocating the initial shares of projects among agents. This paper mainly focuses on the associated issues of compensation of losses and surplus sharing arising from the reallocation of projects. For this purpose, we construct and analyze an associated project-allocation game and a related system of games that explicitly models the underlying cooperative process. Specific solution concepts are proposed