Cooperative decision-making for the provision of a locally undesirable facility

We consider the decentralized provision of global public good with local externalities in a spatially explicit model. Communities (municipalities, cities, countries) decide on the localization of a facility that bene ts to all but exhibits costs to the host and its neighbors. They share the costs through transfers. We examine the cooperative game associated with this so-called NIMBY problem ( Not In My Back-Yard"). We derive and discuss conditions for core solutions to exist and illustrate the results in di erent settings.