Anonymous Price Taking Equilibrium in Tiebout Economies with Unbounded Club Sizes
AbstractWe introduce a model of a local public goods economy with a continuum of agents and jurisdictions with finite, but unbounded populations. Under boundedness of per capita payoffs we demonstrate nonemptiness of the core of the economy. We then demonstrate that the equal treatment core coincides with the set of price-taking equilibrium outcomes with anonymous prices - that is, prices for public goods depend only on observable characteristics of agents. Existence of equilibrium follows from nonemptiness of the core and equivalence of the core to the set of equilibrium outcomes. Our approach provides a new technique for showing existence of equilibrium in economies with a continuum of agents.
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Bibliographic InfoPaper provided by Queen Mary, University of London, School of Economics and Finance in its series Working Papers with number 556.
Date of creation: Mar 2006
Date of revision:
Tiebout; Clubs; Jurisdictions; F-core; Core-equilibrium equivalence; Edgeworth equivalence; Continuum economies with clubs; Crowding types; Core; Equal treatment core;
Find related papers by JEL classification:
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-03-18 (All new papers)
- NEP-PBE-2006-03-18 (Public Economics)
- NEP-URE-2006-03-18 (Urban & Real Estate Economics)
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