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Decentralization in Replicated Club Economies with Multiple Private Goods

  • Gilles, Robert P.
  • Scotchmer, Suzanne

We show that exhaustion of blocking opportunities is a sufficient condition such that every allocation in the core of a replicated club economy can be decentralized as a competitive equilibrium, and that a weaker condition efficient scale is a necessary condition such that any allocation in the core can be decentralized. Efficient scale is defined with respect to the economy as a whole, and not with respect to individual club sizes. These decentralization results do not require the Euclidean structure and monotonicity assumed in Lindahl equilibrium, do not require convexity of preferences or costs, and do not require the strong assumption that private goods are esssential.

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Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 72 (1997)
Issue (Month): 2 (February)
Pages: 363-387

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Handle: RePEc:eee:jetheo:v:72:y:1997:i:2:p:363-387
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622869

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  1. Bewley, Truman F, 1981. "A Critique of Tiebout's Theory of Local Public Expenditures," Econometrica, Econometric Society, vol. 49(3), pages 713-40, May.
  2. Oakland, William H., 1972. "Congestion, public goods and welfare," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 339-357, November.
  3. Sandler, Todd & Tschirhart, John T, 1980. "The Economic Theory of Clubs: An Evaluative Survey," Journal of Economic Literature, American Economic Association, vol. 18(4), pages 1481-1521, December.
  4. Boadway, Robin, 1982. "On the Method of Taxation and the Provision of Local Public Goods: Comment," American Economic Review, American Economic Association, vol. 72(4), pages 846-51, September.
  5. Gilles, Robert P. & Scotchmer, Suzanne, 1995. "Decentralization in Replicated Club Economies with Multiple Private Goods," Department of Economics, Working Paper Series qt22k559dk, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  6. Berglas, Eitan, 1976. "Distribution of tastes and skills and the provision of local public goods," Journal of Public Economics, Elsevier, vol. 6(4), pages 409-423, November.
  7. Suzanne Scotchmer and Greg Engl., 1992. "The Core and the Hedonic Core: Equivalence and Comparative Statics," Economics Working Papers 92-197, University of California at Berkeley.
  8. Suzanne Scotchmer., 1996. "Externality Pricing in Club Economies," Economics Working Papers 96-246, University of California at Berkeley.
  9. Pines, David, 1991. "Tiebout without politics," Regional Science and Urban Economics, Elsevier, vol. 21(3), pages 469-489, November.
  10. Ellickson, Bryan, 1979. "Competitive equilibrium with local public goods," Journal of Economic Theory, Elsevier, vol. 21(1), pages 46-61, August.
  11. Robert P. Gilles & Suzanne Scotchmer & Dimitrios Diamantaras, 1996. "Decentralization of Pareto optima in economies with public projects, nonessential private goods and convex costs (☆)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(3), pages 555-564.
  12. Mark Pauly, 1970. "Cores and clubs," Public Choice, Springer, vol. 9(1), pages 53-65, September.
  13. Scotchmer, Suzanne & Wooders, Myrna Holtz, 1987. "Competitive equilibrium and the core in club economies with anonymous crowding," Journal of Public Economics, Elsevier, vol. 34(2), pages 159-173, November.
  14. Berglas, Eitan & Pines, David, 1980. "Clubs as a case of competitive industry with goods of variable quality," Economics Letters, Elsevier, vol. 5(4), pages 363-366.
  15. Scotchmer, Suzanne, 1985. "Profit-maximizing clubs," Journal of Public Economics, Elsevier, vol. 27(1), pages 25-45, June.
  16. D. K. Foley, 1967. "Lindahl's Solution and the Core of an Economy with Public Goods," Working papers 3, Massachusetts Institute of Technology (MIT), Department of Economics.
  17. Suzanne Scotchmer, 1985. "Two-Tier Pricing of Shared Facilities in a Free-Entry Equilibrium," RAND Journal of Economics, The RAND Corporation, vol. 16(4), pages 456-472, Winter.
  18. Berglas, Eitan & Pines, David, 1981. "Clubs, local public goods and transportation models : A synthesis," Journal of Public Economics, Elsevier, vol. 15(2), pages 141-162, April.
  19. Diamantaras, Dimitrios & Gilles, Robert P & Scotchmer, Suzanne, 1996. "Decentralization of Pareto Optima in Economies with Public Projects, Nonessential Private Goods and Convex Costs," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(3), pages 555-64, October.
  20. Andreu Mas-Colell, 1980. "Efficiency and Decentralization in the Pure Theory of Public Goods," The Quarterly Journal of Economics, Oxford University Press, vol. 94(4), pages 625-641.
  21. Wooders, Myrna, 1978. "Equilibria, the core, and jurisdiction structures in economies with a local public good," Journal of Economic Theory, Elsevier, vol. 18(2), pages 328-348, August.
  22. Brueckner Jan K., 1994. "Tastes, Skills, and Local Public Goods," Journal of Urban Economics, Elsevier, vol. 35(2), pages 201-220, March.
  23. Wooders, Myrna Holtz, 1989. "A Tiebout theorem," Mathematical Social Sciences, Elsevier, vol. 18(1), pages 33-55, August.
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