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The egalitarian sharing rule in provision of public projects

Author

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  • BOGOMOLNAIA, Anna
  • LE BRETON, Michel
  • SAVVATEEV, Alexei
  • WEBER, Shlomo

Abstract

In this note we consider a society that partitions itself into disjoint jurisdictions, each choosing a location of its public project and a taxation scheme to finance it. The set of public project is multi-dimensional, and their costs could vary from jurisdiction to jurisdiction. We impose two principles, egalitarianism, that requires the equalization of the total cost for all agents in the same jurisdiction, and efficiency, that implies the minimization of the aggregate total cost within jurisdiction. We show that these two principles always yield a core-stable partition but a Nash stable partition may fail to exist.

Suggested Citation

  • BOGOMOLNAIA, Anna & LE BRETON, Michel & SAVVATEEV, Alexei & WEBER, Shlomo, 2005. "The egalitarian sharing rule in provision of public projects," CORE Discussion Papers 2005024, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2005024
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    File URL: https://uclouvain.be/en/research-institutes/immaq/core/dp-2005.html
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    References listed on IDEAS

    as
    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, 2004. "Voluntary formation of communities for the provision of public projects," Journal of Economic Theory, Elsevier, vol. 115(1), pages 1-34, March.
    3. Michel Le Breton & Shlomo Weber, 2003. "The Art of Making Everybody Happy: How to Prevent a Secession," IMF Staff Papers, Palgrave Macmillan, vol. 50(3), pages 1-4.
    4. Alberto Alesina & Enrico Spolaore, 1997. "On the Number and Size of Nations," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1027-1056.
    5. Alessandra Casella, 2001. "The Role of Market Size in the Formation of Jurisdictions," Review of Economic Studies, Oxford University Press, vol. 68(1), pages 83-108.
    6. Joseph Farrell & Suzanne Scotchmer, 1988. "Partnerships," The Quarterly Journal of Economics, Oxford University Press, pages 279-297.
    7. Greenberg, Joseph & Weber, Shlomo, 1986. "Strong tiebout equilibrium under restricted preferences domain," Journal of Economic Theory, Elsevier, vol. 38(1), pages 101-117, February.
    8. Bogomolnaia, Anna & Jackson, Matthew O., 2002. "The Stability of Hedonic Coalition Structures," Games and Economic Behavior, Elsevier, vol. 38(2), pages 201-230, February.
    9. 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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    Cited by:

    1. Anna Bogomolnaia & Michel Breton & Alexei Savvateev & Shlomo Weber, 2007. "Stability under unanimous consent, free mobility and core," International Journal of Game Theory, Springer;Game Theory Society, pages 185-204.
    2. Savvateev, A., 2013. "Coalitional Stability of a "Bipolar World"," Journal of the New Economic Association, New Economic Association, vol. 17(1), pages 10-43.

    More about this item

    Keywords

    jurisdictions; stable partitions; public projects; egalitarianism;

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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