Sharing the proceeds from a hierarchical venture

Jens Leth Hougaard, Juan D. Moreno-Ternero, Mich Tvede, Lars Peter Østerdal

Research output: Contribution to journalArticlepeer-review


We consider the problem of distributing the proceeds generated from a joint venture in which the participating agents are hierarchically organized. We introduce and characterize a family of allocation rules where revenue ‘bubbles up’ in the hierarchy. The family is flexible enough to accommodate the no-transfer rule (where no revenue bubbles up) and the full-transfer rule (where all the revenues bubble up to the top of the hierarchy). Intermediate rules within the family are reminiscent of popular incentive mechanisms for social mobilization or multi-level marketing.

Original languageEnglish (US)
Pages (from-to)98-110
Number of pages13
JournalGames and Economic Behavior
StatePublished - Mar 1 2017


  • Geometric rules
  • Hierarchies
  • Joint ventures
  • MIT strategy
  • Resource allocation

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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