BOGOMOLNAIA, Anna LE BRETON, Michel SAVVATEEV, Alexei WEBER, Shlomo
Abstract
In this paper we consider a model with multiple jurisdictions where each formed jurisdiction selects a public project from the given uni-dimensional set, equally shares its cost among its members and places the project at the location of its median resident. We examine a cooperative concept of core stability and a non-cooperative notion of Nash stability of jurisdiction structures. We first consider hedonic games, where each jurisdiction chooses the mean of the extreme points of its median set, and show that both stability notions may lead to an empty set of stable jurisdiction structures. We demonstrate that in a quasi-hedonic set-up, where jurisdictions are allowed to pick any selection from the median set, there is a Nash stable partition, while a core stable partition may still fail to exist. We also consider the equidistant societies and show the existence of both types of stable partitions in this case. Finally, we examine stratification properties of stable partitions.
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Publisher Info
Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number
2005032.
Find related papers by JEL classification: C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
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