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Achieving stability in heterogeneous societies: multi-jurisdictional structures, and redistribution policies


  • Savvateev Alexey



Consider a “linear world” populated by several agents. These agents’ locations are identified with optimal variety of a horizontally differentiated local public good. Agents are to be partitioned into several communities (hereafter, groups), and each group chooses a variety of public good to be produced and consumed by members of that group via the majority voting procedure. It is shown that a stable partition may fail to exist, where stability means that no potential group would like to secede and form a new community. At the same time, compensation schemes are proposed which guarantee the existence of a stable partition. Small societies are studied in detail, as well as certain special types of distributions of agents’ locations.

Suggested Citation

  • Savvateev Alexey, 2004. "Achieving stability in heterogeneous societies: multi-jurisdictional structures, and redistribution policies," EERC Working Paper Series 04-13e, EERC Research Network, Russia and CIS.
  • Handle: RePEc:eer:wpalle:04-13e

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    References listed on IDEAS

    1. 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.
    2. Michel Le Breton & Hideo Konishi & Shlomo Weber, 1996. "Equivalence of strong and coalition-proof Nash equilibria in games without spillovers (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 9(1), pages 97-113.
    3. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    4. HAIMANKO, Ori & LE BRETON , Michel & WEBER, Shlomo, 2002. "On efficiency and sustainability in a collective decision-making problem with heterogeneous agents," CORE Discussion Papers 2002072, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    More about this item


    Russia; stability; partitions; redistribution; core of a cooperative game;

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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