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Migration-proof Tiebout equilibrium: existence and asymptotic efficiency

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  • Conley, John P.
  • Konishi, Hideo

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 Elsevier in its journal Journal of Public Economics.

Volume (Year): 86 (2002)
Issue (Month): 2 (November)
Pages: 243-262

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Handle: RePEc:eee:pubeco:v:86:y:2002:i:2:p:243-262

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Web page: http://www.elsevier.com/locate/inca/505578

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Citations

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Cited by:
  1. Matthias Dahm, 2010. "Free mobility and taste-homogeneity of jurisdiction structures," International Journal of Game Theory, Springer, vol. 39(1), pages 259-272, March.
  2. Hideo Konishi, 1999. "Concentration of Competing Retail Stores," Boston College Working Papers in Economics 447, Boston College Department of Economics.
  3. 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.
  4. 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.
  5. Alois Stutzer & Bruno S. Frey, . "Stress That Doesn't Pay: The Commuting Paradox," IEW - Working Papers 151, Institute for Empirical Research in Economics - University of Zurich.
  6. Vartiainen, Hannu, 2011. "Dynamic coalitional equilibrium," Journal of Economic Theory, Elsevier, vol. 146(2), pages 672-698, March.
  7. Sebastian Kranz, 2006. "Moral Norms in a Partly Compliant Society," Bonn Econ Discussion Papers bgse11_2006, University of Bonn, Germany, revised Jun 2006.
  8. Mumcu, Ayse & Saglam, Ismail, 2010. "Stable one-to-one matchings with externalities," Mathematical Social Sciences, Elsevier, vol. 60(2), pages 154-159, September.
  9. 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.
  10. Karakaya, Mehmet, 2011. "Hedonic coalition formation games: A new stability notion," Mathematical Social Sciences, Elsevier, vol. 61(3), pages 157-165, May.
  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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