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How to Win a Decision in a Confederation

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Author Info
Jehiel, Philippe
Thisse, Jacques-François

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Abstract

This Paper deals with collective decision making within a group of independent jurisdictions. The right to choose the public policy is delegated from the central authority of one of the jurisdictions through a bidding procedure among the group members. We identify the following trade-off: competition among jurisdictions yields higher transfers to the government, but the outcome tends to be less efficient than what it is when jurisdictions negotiate prior to the decision-making process. We extend and illustrate the model by means of a public good game involving several heterogeneous jurisdictions.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3465.

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Date of creation: Jul 2002
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Handle: RePEc:cpr:ceprdp:3465

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Related research
Keywords: auction; confederation; jurisdictions; public good; spillovers;

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Find related papers by JEL classification:
D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
D62 - Microeconomics - - Welfare Economics - - - Externalities
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Helsley, Robert W. & Strange, William C., 1998. "Private government," Journal of Public Economics, Elsevier, vol. 69(2), pages 281-304, June. [Downloadable!] (restricted)
  2. Pines, David, 1991. "Tiebout without politics," Regional Science and Urban Economics, Elsevier, vol. 21(3), pages 469-489, November. [Downloadable!] (restricted)
  3. Torsten Persson & Guido Tabellini, 1999. "Political Economics and Public Finance," NBER Working Papers 7097, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Ian King & R. Preston McAfee & Linda Welling, 1993. "Industrial Blackmail: Dynamic Tax Competition and Public Investment," Canadian Journal of Economics, Canadian Economics Association, vol. 26(3), pages 590-608, August. [Downloadable!] (restricted)
  5. Wildasin, David E., 1988. "Nash equilibria in models of fiscal competition," Journal of Public Economics, Elsevier, vol. 35(2), pages 229-240, March. [Downloadable!] (restricted)
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  6. J. Vernon Henderson & Jacques-Francois Thisse, 2001. "On Strategic Community Development," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 546-569, June. [Downloadable!] (restricted)
  7. Jehiel, Phillippe, 1997. "Bargaining between benevolent jurisdictions or when delegation induces inefficiencies," Journal of Public Economics, Elsevier, vol. 65(1), pages 61-74, July. [Downloadable!] (restricted)
  8. Philippe Jehiel & Benny Moldovanu, 1996. "Strategic Nonparticipation," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 84-98, Spring. [Downloadable!] (restricted)
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  9. Bernheim, B Douglas & Whinston, Michael D, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, MIT Press, vol. 101(1), pages 1-31, February. [Downloadable!] (restricted)
  10. Salant, Stephen W & Switzer, Sheldon & Reynolds, Robert J, 1983. "Losses from Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, MIT Press, vol. 98(2), pages 185-99, May. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Klaus Abbink & Jordi Brandts, 2007. "Political Autonomy and Independence: Theory and Experimental Evidence," Labsi Experimental Economics Laboratory University of Siena 013, University of Siena. [Downloadable!]
  2. Ariane Lambert-Mogiliansky & Konstantin Sonin, 2005. "Collusive market-sharing and corruption in procurement," PSE Working Papers 2005-25, PSE (Ecole normale supérieure). [Downloadable!]
    Other versions:
  3. Helmut Bester, 2009. "Externalities, communication and the allocation of decision rights," Economic Theory, Springer, vol. 41(2), pages 269-296, November. [Downloadable!] (restricted)
    Other versions:
  4. Klaus Abbink & Jordi Brandts, 2007. "Political Autonomy and Independence: Theory and Experimental Evidence," UFAE and IAE Working Papers 689.07, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC). [Downloadable!]
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