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Stability of jurisdiction structures under the equal share and median rules

  • Anna Bogomolnaia
  • Michel Breton
  • Alexei Savvateev
  • Shlomo Weber

    ()

In this paper we consider a model with multiple jurisdictions where each formed jurisdiction selects a public project from the given uni-dimensional set, equally shares its cost among its members and places the project at the location of its median resident. We examine a cooperative concept of core stability and a non-cooperative notion of Nash stability of jurisdiction structures. We first consider hedonic games, where each jurisdiction chooses the mean of the extreme points of its median set, and show that both stability notions may lead to an empty set of stable jurisdiction structures. We demonstrate that in a quasi-hedonic set-up, where jurisdictions are allowed to pick any selection from the median set, there is a Nash stable partition, while a core stable partition may still fail to exist. We also consider the equidistant societies and show the existence of both types of stable partitions in this case. Finally, we examine stratification properties of stable partitions.

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File URL: http://hdl.handle.net/10.1007/s00199-006-0198-z
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Article provided by Springer & Society for the Advancement of Economic Theory (SAET) in its journal Economic Theory.

Volume (Year): 34 (2008)
Issue (Month): 3 (March)
Pages: 525-543

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Handle: RePEc:spr:joecth:v:34:y:2008:i:3:p:525-543
DOI: 10.1007/s00199-006-0198-z
Contact details of provider: Web page: http://www.springer.com

Web page: http://saet.uiowa.edu/

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  1. Philippe Jehiel & Suzanne Scotchmer, 2001. "Constitutional Rules of Exclusion in Jurisdiction Formation," Review of Economic Studies, Oxford University Press, vol. 68(2), pages 393-413.
  2. HAIMANKO, Ori & LE BRETON, Michel & WEBER, Shlomo, 2002. "Transfers in a polarized country: bridging the gap between efficiency and stability," CORE Discussion Papers 2002018, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Casella, Alessandra, 1996. "The Role of Market Size in the Formation of Jurisdictions," CEPR Discussion Papers 1429, C.E.P.R. Discussion Papers.
  4. Steven J. Brams & Michael A. Jones & D. Marc Kilgour, 2002. "Single-Peakedness and Disconnected Coalitions," Journal of Theoretical Politics, SAGE Publishing, vol. 14(3), pages 359-383, July.
  5. Dreze, Jacques & Le Breton, Michel & Weber, Shlomo, 2006. "Rawlsian Pricing of Access to Public Facilities: A Unidimensional Illustration," IDEI Working Papers 409, Institut d'Économie Industrielle (IDEI), Toulouse.
  6. Alberto Alesina & Enrico Spolaore, 1995. "On the Number and Size of Nations," NBER Working Papers 5050, National Bureau of Economic Research, Inc.
  7. Monderer, Dov & Shapley, Lloyd S., 1996. "Potential Games," Games and Economic Behavior, Elsevier, vol. 14(1), pages 124-143, May.
  8. repec:adr:anecst:y:1997:i:45:p:09 is not listed on IDEAS
  9. Greenberg, Joseph & Weber, Shlomo, 1986. "Strong tiebout equilibrium under restricted preferences domain," Journal of Economic Theory, Elsevier, vol. 38(1), pages 101-117, February.
  10. 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.
  11. Le Breton, Michel & Weber, Shlomo, 2003. "The Art of Making Everybody Happy : How to Prevent a Secession," IDEI Working Papers 164, Institut d'Économie Industrielle (IDEI), Toulouse.
  12. Konishi, Hideo & Le Breton, Michel & Weber, Shlomo, 1997. "Pure Strategy Nash Equilibrium in a Group Formation Game with Positive Externalities," Games and Economic Behavior, Elsevier, vol. 21(1-2), pages 161-182, October.
  13. Konishi, Hideo & Le Breton, Michel & Weber, Shlomo, 1998. "Equilibrium in a Finite Local Public Goods Economy," Journal of Economic Theory, Elsevier, vol. 79(2), pages 224-244, April.
  14. Bogomolnaia, Anna & Jackson, Matthew O., 2002. "The Stability of Hedonic Coalition Structures," Games and Economic Behavior, Elsevier, vol. 38(2), pages 201-230, February.
  15. Tayfun Sönmez & Suryapratim Banerjee & Hideo Konishi, 2001. "Core in a simple coalition formation game," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 18(1), pages 135-153.
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