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Stable sets of allocations and the provision of public goods

Author

Listed:
  • Maria Gabriella Graziano

    () (University of Napoli Federico II, Complesso Monte S. Angelo)

  • Maria Romaniello

    () (Seconda Universitá di Napoli)

Abstract

Abstract In a market model with public projects, we introduce and study von Neumann–Morgenstern stable sets. Stability concepts derive from a procedure in which the blocking coalitions are responsible for a share of the total cost of the public project. This share is determined by a contribution measure. Moreover, the analysis is extended to the case in which traders can join a coalition with a grade of membership. In this framework, under proper assumptions, we provide a correspondence between stable sets of an economy with finitely many types and stable sets of an associated finite economy and prove uniqueness of stable sets when the dominance is defined over a suitable family of coalitions.

Suggested Citation

  • Maria Gabriella Graziano & Maria Romaniello, 2016. "Stable sets of allocations and the provision of public goods," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 62(1), pages 15-42, June.
  • Handle: RePEc:spr:joecth:v:62:y:2016:i:1:d:10.1007_s00199-014-0854-7
    DOI: 10.1007/s00199-014-0854-7
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    References listed on IDEAS

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    More about this item

    Keywords

    Public projects; Contribution measures; Coalitions; Von Neumann–Morgenstern stable sets; Sophisticated stable sets;

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D60 - Microeconomics - - Welfare Economics - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

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