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How to Win a Decision in a Confederation

Listed author(s):
  • Philippe Jehiel

    (CERAS - Centre d'enseignement et de recherche en analyse socio-économique - École des Ponts ParisTech (ENPC), CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain, CEPR - Center for Economic Policy Research - CEPR)

  • Jacques-François Thisse

    (CERAS - Centre d'enseignement et de recherche en analyse socio-économique - École des Ponts ParisTech (ENPC), CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain, CEPR - Center for Economic Policy Research - CEPR)

This paper deals with collective decision making within a group of independent states. The right to choose the public policy is delegated from the central authority to one of the states through a bidding procedure among the group state members. We identify the following tradeoff: competition among states yields higher transfers to the central authority, but the outcome tends to be less efficient than what it is when states negotiate prior to the decision making process. We extend and illustrate the model by means of a public good game involving several heterogeneous states.

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Paper provided by HAL in its series Post-Print with number halshs-00754075.

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Date of creation: Jul 2005
Publication status: Published in Journal of Public Economics, Elsevier, 2005, 89 (7), pp.1191-1210. <10.1016/j.jpubeco.2003.04.001>
Handle: RePEc:hal:journl:halshs-00754075
DOI: 10.1016/j.jpubeco.2003.04.001
Note: View the original document on HAL open archive server: https://hal-pjse.archives-ouvertes.fr/halshs-00754075
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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  1. Jehiel, Philippe & Moldovanu, Benny, 1995. "Negative Externalities May Cause Delay in Negotiation," Econometrica, Econometric Society, vol. 63(6), pages 1321-1335, November.
  2. Persson, Torsten & Tabellini, Guido, 2002. "Political economics and public finance," Handbook of Public Economics,in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659 Elsevier.
  3. Ian King & R. Preston McAfee & Linda Welling, 1993. "Industrial Blackmail: Dynamic Tax Competition and Public Investment," Canadian Journal of Economics, Canadian Economics Association, vol. 26(3), pages 590-608, August.
  4. Jehiel, Phillippe, 1997. "Bargaining between benevolent jurisdictions or when delegation induces inefficiencies," Journal of Public Economics, Elsevier, vol. 65(1), pages 61-74, July.
  5. William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, 03.
  6. B. Douglas Bernheim & Michael D. Whinston, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 101(1), pages 1-31.
  7. Stephen W. Salant & Sheldon Switzer & Robert J. Reynolds, 1983. "Losses From Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, Oxford University Press, vol. 98(2), pages 185-199.
  8. Wildasin, David E., 1988. "Nash equilibria in models of fiscal competition," Journal of Public Economics, Elsevier, vol. 35(2), pages 229-240, March.
  9. Helsley, Robert W. & Strange, William C., 1998. "Private government," Journal of Public Economics, Elsevier, vol. 69(2), pages 281-304, June.
  10. Pines, David, 1991. "Tiebout without politics," Regional Science and Urban Economics, Elsevier, vol. 21(3), pages 469-489, November.
  11. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(2), pages 269-304, June.
  12. J. Vernon Henderson & Jacques-Francois Thisse, 2001. "On Strategic Community Development," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 546-569, June.
  13. Martin, Philippe, 1999. "Public policies, regional inequalities and growth," Journal of Public Economics, Elsevier, vol. 73(1), pages 85-105, July.
  14. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 269-304, June.
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