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Inter-group relocation policies

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  • Nicolas Quérou

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier)

Abstract

We analyze the distributional and welfare effects of an inter-group relocation policy in games featuring strategic spillovers and externalities within and between groups of agents. Conclusions depend on whether in-group interactions feature strategic substitutes or complements, and on whether strategic complements are weak or strong. When groups differ in size, while in-and out-group strategic spillover effects have the same magnitude, there are welfare gains but the policy is not Pareto improving. When only in-and out-group strategic spillovers differ in magnitude, Pareto improving cases exist, and are fully characterized, under in-group strategic substitutes and strong complements. The policy has also a positive welfare effect under weak strategic complements. This case requires a higher degree of heterogeneity in fundamentals for the policy to be Pareto improving.

Suggested Citation

  • Nicolas Quérou, 2025. "Inter-group relocation policies," CEE-M Working Papers hal-05125710, CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro.
    • Handle: RePEc:hal:wpceem:hal-05125710
    Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-05125710v1
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