Voluntary formation of communities for the provision of public projects

Ori Haimanko, Michel Le Breton, Shlomo Weber

Research output: Contribution to journalArticlepeer-review

22 Scopus citations

Abstract

In this paper we examine a group formation problem, where heterogeneous individuals partitioned themselves into communities, each choosing its own public project from the given space of feasible projects. The model is that of "horizontal product differentiation" where individuals display distinct preferences over the policy space. We consider the notion of "efficient" configuration that minimizes the total project-related costs and aggregate personalized costs of all individuals, and "sustainable" configurations, those are immune against breakaways by subgroups of individuals. Our main result is that, with a unidimensional project space and single-peaked personalized costs, every efficient partition is sustainable.

Original languageEnglish
Pages (from-to)1-34
Number of pages34
JournalJournal of Economic Theory
Volume115
Issue number1
DOIs
StatePublished - 1 Jan 2004

Keywords

  • Configurations
  • Core
  • Efficiency
  • Partitions
  • Personalized costs
  • Public project
  • Sustainability

ASJC Scopus subject areas

  • Economics and Econometrics

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