Coalition Formation with Local Public Goods and Network Effect
Many local public goods are provided by coalitions and some of them have network effects. Namely, people prefer to consume a public good in a coalition with more members. This paper adopts the Drèze and Greenberg (1980) type utility function where players have preferences over goods as well as coalition members. In a game with anonymous and separable network effect, the core is nonempty when coalition feasible sets are monotonic and players' preferences over public goods have connected support. All core allocations consist of connected coalitions and they are Tiebout equilibria as well. We also examine the no-exodus equilibrium for games whose feasible sets are not monotonic.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fan-chin Kung, 2005. "Formation of Collective Decision-Making Units: Stability and a Solution," Game Theory and Information 0505002, EconWPA, revised 21 Jun 2005.
- Le Breton, M. & Owen, G. & Weber, S., 1991.
"Strongly Balanced Cooperative Games,"
91a09, Universite Aix-Marseille III.
- Nicholas Economides, 1997.
"Network Externalities, Complementarities, and Invitations to Enter,"
- Economides, Nicholas, 1996. "Network externalities, complementarities, and invitations to enter," European Journal of Political Economy, Elsevier, vol. 12(2), pages 211-233, September.
- Church, Jeffrey & Gandal, Neil, 1992. "Network Effects, Software Provision, and Standardization," Journal of Industrial Economics, Wiley Blackwell, vol. 40(1), pages 85-103, March.
- Guesnerie, Roger & Oddou, Claude, 1981.
"Second best taxation as a game,"
Journal of Economic Theory,
Elsevier, vol. 25(1), pages 67-91, August.
- Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-40, June.
- Herbert E. Scarf, 1965. "The Core of an N Person Game," Cowles Foundation Discussion Papers 182R, Cowles Foundation for Research in Economics, Yale University.
- Mamoru Kaneko & Myrna Holtz Wooders, 1982.
"Cores of Partitioning Games,"
Cowles Foundation Discussion Papers
620, Cowles Foundation for Research in Economics, Yale University.
- Dreze, J H & Greenberg, J, 1980. "Hedonic Coalitions: Optimality and Stability," Econometrica, Econometric Society, vol. 48(4), pages 987-1003, May.
- Greenberg, J. & Weber, S., 1991.
"Stable Coalition Structure with Unidimensional Set of Alternatives,"
91-11, York (Canada) - Department of Economics.
- Greenberg, J. & Weber, S., 1991. "Stable Coalition Structures with Unidimensional Set of Alternatives," Papers 9133, Tilburg - Center for Economic Research.
- 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.
- Konishi, Hideo & Le Breton, Michel & Weber, Shlomo, 1997. "Pure Strategy Nash Equilibrium in a Group Formation Game with Positive Externalities," Games and Economic Behavior, Elsevier, vol. 21(1-2), pages 161-182, October.
- Greenberg, Joseph & Weber, Shlomo, 1986. "Strong tiebout equilibrium under restricted preferences domain," Journal of Economic Theory, Elsevier, vol. 38(1), pages 101-117, February.
- Bogomolnaia, Anna & Jackson, Matthew O., 2002. "The Stability of Hedonic Coalition Structures," Games and Economic Behavior, Elsevier, vol. 38(2), pages 201-230, February.
- Grandmont, Jean-Michel, 1978. "Intermediate Preferences and the Majority Rule," Econometrica, Econometric Society, vol. 46(2), pages 317-30, March.
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpga:0506007. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA)
If references are entirely missing, you can add them using this form.