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Locally optimal transfer free mechanisms for border dispute settlement

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  • Grüner, Hans Peter

Abstract

Individuals living in a contested region are privately informed about their preference for citizenship in two rivalling countries. Not all frontiers are technically feasible which is why not everybody can live in his preferred country. Monetary transfers are not feasible. When citizens only care about their own citizenship and types are drawn independently, a simple mechanism with simultaneous binary messages implements a social choice function that maximizes the expected sum of local residents' payoffs. This mechanism selects a feasible allocation that maximizes the number of individuals who live in what they say is their preferred country. An approval voting mechanism implements the same social choice function but does not require any knowledge about voters' location. Sequential voting and electoral competition may instead lead to suboptimal outcomes.

Suggested Citation

  • Grüner, Hans Peter, 2022. "Locally optimal transfer free mechanisms for border dispute settlement," CEPR Discussion Papers 17142, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:17142
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    More about this item

    Keywords

    Mechanism design without transfers; Border dispute settlement; Voting; Approval voting;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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