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Pools or Schools or Both? Diversification and Specialisation in Public Services

Author

Listed:
  • Tomas Cernenko
  • Oliver Rafaj
  • Daniel Dujava

Abstract

We develop a model of two municipalities providing two public services. We show that in case of intermediate level of transferability of public services between two municipalities, Pareto-suboptimal Nash equilibrium exists. In this case, cooperation between municipalities or merging of two municipalities into one unit would improve welfare.

Suggested Citation

  • Tomas Cernenko & Oliver Rafaj & Daniel Dujava, 2019. "Pools or Schools or Both? Diversification and Specialisation in Public Services," Department of Economic Policy Working Paper Series 020, Department of Economic Policy, Faculty of National Economy, University of Economics in Bratislava.
    • Handle: RePEc:brt:depwps:020
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    File URL: https://nhf.euba.sk/www_write/files/katedry/khp/working-papers/dep_wp020.pdf
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    More about this item

    Keywords

    diversification; game theory; public services; specialisation;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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