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The egalitarian sharing rule in provision of public goods

Author

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  • BOGOMOLNAIA, Anna
  • LE BRETON, Michel
  • SAVVATEEV, Alexei
  • WEBER, Shlomo

Abstract

In this note we consider a society that partitions itself into disjoint jurisdictions, each choosing a location of its public project and a taxation scheme to finance it. The set of public project is multi-dimensional, and their costs could vary from jurisdiction to jurisdiction. We impose two principles, egalitarianism, that requires the equalization of the total cost for all agents in the same jurisdiction, and efficiency, that implies the minimization of the aggregate total cost within jurisdiction. We show that these two principles always yield a core-stable partition but a Nash stable partition may fail to exist. We demonstrate moreover that stable partitions are not necessarily consecutive.
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Suggested Citation

  • BOGOMOLNAIA, Anna & LE BRETON, Michel & SAVVATEEV, Alexei & WEBER, Shlomo, 2005. "The egalitarian sharing rule in provision of public goods," LIDAM Reprints CORE 1775, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:1775
    Note: In :Economics Bulletin, 8(11), 1-5, 2005
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    References listed on IDEAS

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    1. Philippe Jehiel & Suzanne Scotchmer, 2001. "Constitutional Rules of Exclusion in Jurisdiction Formation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(2), pages 393-413.
    2. Michel Le Breton & Shlomo Weber, 2003. "The Art of Making Everybody Happy: How to Prevent a Secession," IMF Staff Papers, Palgrave Macmillan, vol. 50(3), pages 1-4.
    3. Alberto Alesina & Enrico Spolaore, 1997. "On the Number and Size of Nations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1027-1056.
    4. Greenberg, Joseph & Weber, Shlomo, 1986. "Strong tiebout equilibrium under restricted preferences domain," Journal of Economic Theory, Elsevier, vol. 38(1), pages 101-117, February.
    5. Bogomolnaia, Anna & Jackson, Matthew O., 2002. "The Stability of Hedonic Coalition Structures," Games and Economic Behavior, Elsevier, vol. 38(2), pages 201-230, February.
    6. 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.
    7. Dreze, Jacques & Le Breton, Michel & Weber, Shlomo, 2004. "The Rawslian Principle and Secession-Proofness in Large Heterogeneous Societies," IDEI Working Papers 283, Institut d'Économie Industrielle (IDEI), Toulouse.
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    Cited by:

    1. Musatov, D. & Savvateev, A., 2022. "Mathematical models of stable jurisdiction partitions: A survey of results and new directions," Journal of the New Economic Association, New Economic Association, vol. 54(2), pages 12-38.

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    More about this item

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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