|
on Microeconomics |
| By: | Battaglini, Marco; Nunnari, Salvatore; Palfrey, Thomas |
| Abstract: | We present a legislative bargaining model of the provision of a durable public good over an infinite horizion. In each period, there is a societal endowment which can either be invested in the public good or consumed. We characterize the optimal public policy, defined by the time path of investment and consumption. In each period, a legislature with presentatives of each of n districts bargain over the current period's endowment for investment in the public good and transfers to each district. We analyze the Markov perfect equilibrium under different voting q-rules where q is the number of yes votes required for passage. We show that the efficiency of the public policy is increasing in q because higher q leads to higher investment in the public good and less pork. We examine the theoretical equilibrium predictions by conducting a laboratory experiment with fiveperson committees that compares three alternative voting rules: unanimity (q=5); majority (q=3); and dictatorship (q=1). -- |
| Keywords: | dynamic political economy,voting,public goods,bargaining,experiments |
| JEL: | D71 D72 C78 C92 H41 H54 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbmbh:spii2011205&r=mic |
| By: | Derks, Jean (Department of Knowledge Engineering); Peters, Hans (Department of Quantitative Economics); Sudhölter, Peter (Department of Business and Economics) |
| Abstract: | We consider several related set extensions of the core and the anticore of games with transferable utility. An efficient allocation is undominated if it cannot be improved, in a specific way, by sidepayments changing the allocation or the game. The set of all such allocations is called the undominated set, and we show that it consists of finitely many polytopes with a core-like structure. One of these polytopes is the L1-center, consisting of all efficient allocations that minimize the sum of the absolute values of the excesses. The excess Pareto optimal set contains the allocations that are Pareto optimal in the set obtained by ordering the sums of the absolute values of the excesses of coalitions and the absolute values of the excesses of their complements. The L1-center is contained in the excess Pareto optimal set, which in turn is contained in the undominated set. For three-person games all these sets coincide. These three sets also coincide with the core for balanced games and with the anticore for antibalanced games. We study properties of these sets and provide characterizations in terms of balanced collections of coalitions. We also propose a single-valued selection from the excess Pareto optimal set, the min-prenucleolus, which is defined as the prenucleolus of the minimum of a game and its dual. |
| Keywords: | Transferable utility game; core; anticore; core extension; min-prenucleolus |
| JEL: | C71 |
| Date: | 2012–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sdueko:2012_004&r=mic |
| By: | Khmelnitskaya, Anna B. (Faculty of Applied Mathematics); Sudhölter, Peter (Department of Business and Economics) |
| Abstract: | t is well-known that the prenucleolus on the class of TU games is characterized by singlevaluedness, covariance under strategic equivalence, anonymity, and the reduced game property. We show that the prenucleolus on the class of TU games restricted to the connected coalitions with respect to communication structures may be characterized by the same axioms and a stronger version of independence of non-connected coalitions requiring that the solution does not depend on the worth of any non-connected coalition. Similarly as in the classical case, it turns out that each of the five axioms is logically independent of the remaining axioms and that an infinite universe of potential players is necessary. Moreover, a suitable definition and characterization of a prekernel for games with communication structures is presented. |
| Keywords: | TU game; solution concept; communication and conference structure; nucleolus |
| JEL: | C71 |
| Date: | 2011–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sdueko:2011_010&r=mic |