Decentralization, Externalities, and Efficiency

Externalities, Efficiency and Equity

Efficiency in coalition games with externalities

A natural extension of superadditivity is not sufficient to imply that the grand coalition is efficient when externalities are present. We provide a condition, analogous to convexity, that is sufficient for the grand coalition to be efficient and show that this also implies that the (appropriately defined) core is nonempty. Moreover, we propose a mechanism which implements the most efficient pa...

Networks as Public Infrastructure : Externalities , Efficiency , and Implementation ∗

First a non-cooperative model of network formation is investigated where link formation is one-sided and information flow is two-way. For that model, the relationship between different notions of efficient networks is studied: Pareto optimal networks on the one hand and welfare maximizing networks on the other hand. Strategic network formation is compared with funding schemes for public goods. ...

Centralization and decentralization: Theories and Models

The questions of centralization and decentralization arise in every polity. The constitution or the practice or both have to settle how much of policy making is to be decided by the central government and by component bodies. By and large liberalism and decentralization tend to go together while authoritarianism tends to be associated with centralization. The constitutional model which is gener...

Externalities and fundamental nonconvexities: A reconciliation of approaches to general equilibrium externality modeling and implications for decentralization

Starrett (1972) [33] and Boyd and Conley (1997) [7] approaches to externality modeling are unified by distinguishing between producible and nonproducible public commodities. Nonconvexities are associated with detrimental producible public commodities but not with nonproducible public commodities in Boyd and Conley (1997) [7]. Disposability properties (costly or costless) imply that producible p...