A marginal payoff symmetric solution and its applications to a land corn production economy

A marginal payoff symmetric solution and its applications to a land corn production economy

We introduce axioms related to marginal payoff symmetry that reflects the possibility of mutual agreement, and characterized a new solution with efficiency, symmetry, additivity, and scale dummy; scale dummy is related to the externality of scale. In this paper, we mainly apply the solution to a land corn production economy. For the economy with a linear production function, it leads to a sustainable economy, while alternatives such as the Shapley value fail the property. Assuming a concave production function, interestingly, the solution can explain a paradox, that is, already employed workers block additional employment if the wage is high at a certain level, even though the landlord wants to increase the scale. Thus, we can find a unique employment point, which is agreeable among all the already participating agents.