Working Paper BETA #2011-04

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Title : Data games: Sharing public goods with exclusion.

Author(s) : Pierre Dehez, Daniela Tellone

Abstract : A group of firms decides to cooperate on a project that requires a combination of inputs held by some of them. These inputs are non-rival but excludable goods i.e. public goods with exclusion such as knowledge, data or information, patents or copyrights. We address the question of how firms should be compensated for the inputs they contribute. We show that this problem can be framed within a cost sharing game whose Shapley comes out as a natural solution. The main result concerns the regular structure of the core that enables a simple characterization of the nucleolus. However, compared to the Shapley value, the nucleolus defines compensations that appear to be less appropriate in the context of data sharing. Our analysis is inspired by the problem faced by the European chemical firms within the regulation program REACH that requires submission by 2018 of a detailed analysis of the substances they produce, import or use.

Key-words : cost sharing, Shapley value, core, nucleolus.

JEL Classification : C71, H41, M41