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Cooperative decision-making for the provision of a locally undesirable facility

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  • Stefan Ambec
  • Yann Kervinio

Abstract

We consider the decentralized provision of a global public good with local externalities in a spatially explicit model. Communities decide on the location of a facility that benefits everyone but exhibits costs to the host and its neighbors. They share the costs through transfers. We examine cooperative games associated with this so-called Not In My Back-Yard problem. We derive and discuss conditions for core solutions to exist. These conditions are driven by the temptation to exclude groups of neighbors at any potential location. We illustrate the results in different spatial settings. These results clarify how property rights can affect cooperation and shed further light on a limitation of the Coase theorem. Copyright Springer-Verlag Berlin Heidelberg 2016

Suggested Citation

  • Stefan Ambec & Yann Kervinio, 2016. "Cooperative decision-making for the provision of a locally undesirable facility," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 46(1), pages 119-155, January.
    • Handle: RePEc:spr:sochwe:v:46:y:2016:i:1:p:119-155
    DOI: 10.1007/s00355-015-0907-2
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    Cited by:

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    3. Ferraz, Eduardo & Mantilla, César, 2023. "A mechanism for the efficient provision of Potential Pareto public goods," Journal of Public Economics, Elsevier, vol. 225(C).
    4. Kevin Techer, 2023. "Hazardous waste transportation: a cost allocation analysis," Working Papers hal-04099139, HAL.

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    More about this item

    Keywords

    C71; D62; Q53; R53;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

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