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Achieving stability in heterogeneous societies: multi-jurisdictional structures, and redistribution policies

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Author Info
Savvateev Alexey ()

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Abstract

Consider a “linear world” populated by several agents. These agents’ locations are identified with optimal variety of a horizontally differentiated local public good. Agents are to be partitioned into several communities (hereafter, groups), and each group chooses a variety of public good to be produced and consumed by members of that group via the majority voting procedure. It is shown that a stable partition may fail to exist, where stability means that no potential group would like to secede and form a new community. At the same time, compensation schemes are proposed which guarantee the existence of a stable partition. Small societies are studied in detail, as well as certain special types of distributions of agents’ locations.

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Publisher Info
Paper provided by EERC Research Network, Russia and CIS in its series EERC Working Paper Series with number 04-13e.

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Length: 31 pages
Date of creation: 25 Dec 2004
Date of revision:
Handle: RePEc:eer:wpalle:04-13e

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Related research
Keywords: Russia; stability; partitions; redistribution; core of a cooperative game;

Find related papers by JEL classification:
D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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