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Migration-proof Tiebout equilibrium:Existence and asymptotic efficiency

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  • John Conley

    ()
    (University of Illinois)

  • Hideo Konishi

    ()
    (Boston College)

Abstract

Tiebout's basic claim was that when public goods are local, competition between jurisdictions solves the free riding problem in the sense that equilibria exist and are always Pareto efficient. Unfortunately, the literature does not quite support this conjecture. For finite economies, one must choose between notions of Tiebout equilibrium which are Pareto optimal but which may be empty, or which are nonempty but may be inefficient. This paper introduces a new equilibrium notion called "migration-proof Tiebout equilibrium" which we argue is a natural refinement of Nash equilibrium for a multijurisdictional environment. We show for sufficiently large economies with homogeneous consumers, such an equilibrium always exists, is unique, and is asymptotically Pareto efficient

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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 28 (2001)
Issue (Month): 1 ()
Pages: A0

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Handle: RePEc:ebl:ecbull:eb-01aa0004

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Citations

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Cited by:
  1. Dahm, Matthias, 2009. "Free Mobility and Taste-Homogeneity of Jurisdiction Structures," Working Papers 2072/15809, Universitat Rovira i Virgili, Department of Economics.
  2. Sebastian Kranz, 2006. "Moral Norms in a Partly Compliant Society," Levine's Bibliography 321307000000000092, UCLA Department of Economics.
  3. Stutzer, Alois & Frey, Bruno S., 2004. "Stress That Doesn't Pay: The Commuting Paradox," IZA Discussion Papers 1278, Institute for the Study of Labor (IZA).
  4. Hideo Konishi, 1999. "Concentration of Competing Retail Stores," Boston College Working Papers in Economics 447, Boston College Department of Economics.
  5. Karakaya, Mehmet, 2011. "Hedonic coalition formation games: A new stability notion," Mathematical Social Sciences, Elsevier, vol. 61(3), pages 157-165, May.
  6. Vartiainen, Hannu, 2011. "Dynamic coalitional equilibrium," Journal of Economic Theory, Elsevier, vol. 146(2), pages 672-698, March.
  7. Mumcu, Ayse & Saglam, Ismail, 2010. "Stable one-to-one matchings with externalities," Mathematical Social Sciences, Elsevier, vol. 60(2), pages 154-159, September.
  8. Gilles, R.P. & Lazarova, E.A. & Ruys, P.H.M., 2011. "Economic Institutions and Stability: A Network Approach," Discussion Paper 2011-084, Tilburg University, Center for Economic Research.
  9. Gilles, R.P. & Lazarova, E.A. & Ruys, P.H.M., 2008. "Stable Economic Cooperation: A Relational Approach," Discussion Paper 2008-25, Tilburg University, Center for Economic Research.
  10. Duygu Nizamogullari & İpek Özkal-Sanver, 2011. "Coalitional stability and efficiency of partitions in matching problems," Theory and Decision, Springer, vol. 71(3), pages 395-407, September.
  11. Frank H. Page, Jr. & Myrna H. Wooders, 2005. "Club Formation Games with Farsighted Agents," Vanderbilt University Department of Economics Working Papers 0529, Vanderbilt University Department of Economics.

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