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Free Mobility and the Optimal Number of Jurisdictions

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  • Philippe Jehiel
  • Suzanne Scotchmer

Abstract

In a free mobility equilibrium with voting for pure public goods within jurisdictions and equal cost sharing, consumers will partition themselves such that high-demand jurisdictions are much larger than low-demand jurisdictions. We compare the welfare implications of a change in the number of jurisdictions. We find in a fairly simple but natural model of a large economy that if one restricts to odd numbers of jurisdictions, a smaller number is better, but among even numbers of jurisdictions the reverse holds. Further, any odd number is preferable to any even number.

Suggested Citation

  • Philippe Jehiel & Suzanne Scotchmer, 1997. "Free Mobility and the Optimal Number of Jurisdictions," Annals of Economics and Statistics, GENES, issue 45, pages 219-231.
  • Handle: RePEc:adr:anecst:y:1997:i:45:p:219-231
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    File URL: http://www.jstor.org/stable/20076057
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    Cited by:

    1. Drèze, Jacques & Le Breton, Michel & Savvateev, Alexei & Weber, Shlomo, 2008. ""Almost" subsidy-free spatial pricing in a multi-dimensional setting," Journal of Economic Theory, Elsevier, vol. 143(1), pages 275-291, November.
    2. Matthias Dahm, 2010. "Free mobility and taste-homogeneity of jurisdiction structures," International Journal of Game Theory, Springer;Game Theory Society, vol. 39(1), pages 259-272, March.

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