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Share equilibrium in local public good economies

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  • van den Nouweland, Anne
  • Wooders, Myrna

Abstract

We define a concept of share equilibrium for local public good (or club) economies where individual members of the population may have preferences over the membership of their jurisdiction. A share equilibrium specifies one share index for each individual. These indices determine each individual’s cost shares in any jurisdiction that he might join. We demonstrate that the same axioms as those that characterize the Lindahl equilibrium, as discussed in Lindahl’s 1919 paper, also characterize the share equilibrium. Share equilibrium extends the notions of ratio equilibrium and cost share equilibrium (due to Kaneko, 1977; Mas-Colell and Silvestre, 1989) to economies with a local public good and possibly multiple jurisdictions.

Suggested Citation

  • van den Nouweland, Anne & Wooders, Myrna, 2011. "Share equilibrium in local public good economies," Journal of Mathematical Economics, Elsevier, vol. 47(3), pages 376-381.
  • Handle: RePEc:eee:mateco:v:47:y:2011:i:3:p:376-381
    DOI: 10.1016/j.jmateco.2010.12.008
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    References listed on IDEAS

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    1. Amrita Dhillon & Jean-Francois Mertens, 1999. "Relative Utilitarianism," Econometrica, Econometric Society, vol. 67(3), pages 471-498, May.
    2. Allouch, Nizar & Wooders, Myrna, 2008. "Price taking equilibrium in economies with multiple memberships in clubs and unbounded club sizes," Journal of Economic Theory, Elsevier, vol. 140(1), pages 246-278, May.
    3. Anne van den Nouweland & Myrna H. Wooders & S. Tijs, 2002. "Axiomatization of ratio equilibria in public good economies," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 19(3), pages 627-636.
    4. Hervé Moulin, 2000. "Priority Rules and Other Asymmetric Rationing Methods," Econometrica, Econometric Society, vol. 68(3), pages 643-684, May.
    5. Reny, Philip J. & Holtz Wooders, Myrna, 1996. "The Partnered Core of a Game without Side Payments," Journal of Economic Theory, Elsevier, vol. 70(2), pages 298-311, August.
    6. Eric Maskin, 1999. "Nash Equilibrium and Welfare Optimality," Review of Economic Studies, Oxford University Press, vol. 66(1), pages 23-38.
    7. van den Nouweland, A. & Peleg, B. & Tijs, S., 1996. "Axiomatic characterizations of the Walras correspondence for generalized economies," Journal of Mathematical Economics, Elsevier, vol. 25(3), pages 355-372.
    8. Mas-Colell, Andreu & Silvestre, Joaquim, 1989. "Cost share equilibria: A Lindahlian approach," Journal of Economic Theory, Elsevier, vol. 47(2), pages 239-256, April.
    9. 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.
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    Cited by:

    1. Anne Van den Nouweland & Agnieszka Rusinowska, 2018. "Bargaining Foundation for Ratio Equilibrium in Public Good Economies," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01720001, HAL.
    2. repec:eee:matsoc:v:89:y:2017:i:c:p:50-60 is not listed on IDEAS
    3. Anne van den Nouweland & Agnieszka Rusinowka, 2018. "Bargaining Foundation for Ratio Equilibrium in Public Good Economies," Documents de travail du Centre d'Economie de la Sorbonne 18004, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    4. Anne Van den nouweland & Myrna Wooders, 2016. "Existence of Share Equilibrium in Symmetric Local Public Good Economies∗," Vanderbilt University Department of Economics Working Papers 16-00008, Vanderbilt University Department of Economics.

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