scholarly journals Efficiency, Welfare, and Political Competition *

2015 ◽  
Vol 131 (1) ◽  
pp. 461-518 ◽  
Author(s):  
Felix J. Bierbrauer ◽  
Pierre C. Boyer
Keyword(s):  
Private Information ◽  
Political Competition ◽  
Income Taxation ◽  
Symmetric Equilibrium ◽  
Public Goods Provision ◽  
Trade Off ◽  
Private Goods ◽  
Incentive Compatible ◽  
Equity And Efficiency ◽  
Pareto Efficient

Abstract We study political competition in an environment in which voters have private information about their preferences. Our framework covers models of income taxation, public-goods provision, or publicly provided private goods. Politicians are vote-share maximizers. They can propose any policy that is resource-feasible and incentive-compatible. They can also offer special favors to subsets of the electorate. We prove two main results. First, the unique symmetric equilibrium is such that policies are surplus-maximizing and hence first-best Pareto-efficient. Second, there is a surplus-maximizing policy that wins a majority against any welfare-maximizing policy. Thus, in our model, policies that trade off equity and efficiency considerations are politically infeasible.

Profit-Maximizing Sale of a Discrete Public Good via the Subscription Game in Private-Information Environments

2010 ◽  
Vol 10 (1) ◽  
Author(s):  
Stefano Barbieri ◽  
David A. Malueg
Keyword(s):  
Public Good ◽  
Private Information ◽  
Piecewise Linear ◽  
Expected Profit ◽  
Symmetric Equilibrium ◽  
Bayesian Game ◽  
Incentive Compatible ◽  
Equilibrium Strategies ◽  
Private Values ◽  
Discrete Public Good

We analyze a symmetric Bayesian game in which two players individually contribute to fund a discrete public good; contributions are refunded if they do not reach a threshold set by the seller of the good. We characterize the distributions of players' private values that can support a symmetric equilibrium in continuous piecewise-linear strategies, and we calculate these strategies. Allowing the seller to charge an entry fee before players make their private contributions, we show these piecewise-linear equilibrium strategies maximize the seller's expected profit over all incentive compatible selling mechanisms.

scholarly journals Pareto Efficient Auctions with Interest Rates

2019 ◽  
Vol 33 ◽  
pp. 1989-1995
Author(s):  
Gagan Goel ◽  
Vahab Mirrokni ◽  
Renato Paes Leme
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Utility Functions ◽  
Limited Access ◽  
Incentive Compatible ◽  
Pareto Efficient ◽  
Available Resources

We consider auction settings in which agents have limited access to monetary resources but are able to make payments larger than their available resources by taking loans with a certain interest rate. This setting is a strict generalization of budget constrained utility functions (which corresponds to infinite interest rates). Our main result is an incentive compatible and Pareto-efficient auction for a divisible multi-unit setting with 2 players who are able to borrow money with the same interest rate. The auction is an ascending price clock auction that bears some similarities to the clinching auction but at the same time is a considerable departure from this framework: allocated goods can be de-allocated in future and given to other agents and prices for previously allocated goods can be raised.

scholarly journals Swords and Plowshares: Property Rights, Collective Action, and Nonstate Governance in the Jewish Community of Palestine 1920–1948

2021 ◽  
pp. 1-15
Author(s):  
DAVID MUCHLINSKI
Keyword(s):  
Property Rights ◽  
Public Goods ◽  
Jewish Community ◽  
Causal Effect ◽  
Public Goods Provision ◽  
Public And Private ◽  
Private Goods ◽  
Agricultural Communities ◽  
Institutional Variation ◽  
Subnational Governance

Developing states lacking a monopoly over the use of force are commonly seen as having failed to live up to the ideal Weberian sovereign type. Yet rather than being a calling card of anarchy, the devolution of important state functions to subnational actors is a rational strategy for developing states to effectively provide important public goods. The case study of the Jewish Community of Palestine demonstrates one instance where subnational communities provided public goods. This study highlights the causal effect of property rights within institutions to drive behavior consistent with the provision of public and private goods. Analyzing temporal and institutional variation across two agricultural communities demonstrates a unique strategy of subnational governance and public goods provision in a developing state. Devolution of public goods provision to subnational actors may be an alternative strategy of governance for developing states that are not yet able to effectively provide important public goods.

I Don't Care to Belong to Any Club That Will Have Me as a Member: Empirical Analysis of Municipal Mergers

2013 ◽  
Vol 2 (1) ◽  
pp. 97-117 ◽  
Author(s):  
Tuukka Saarimaa ◽  
Janne Tukiainen
Keyword(s):  
Population Size ◽  
Empirical Analysis ◽  
Economies Of Scale ◽  
Empirical Work ◽  
Local Public Goods ◽  
Local Democracy ◽  
Public Goods Provision ◽  
Trade Off ◽  
Voter Preferences ◽  
Fiscal Pressure

The efficiencyof local public goods provision and the functioning of local democracy crucially depend on the size and number of local jurisdictions. This article empirically analyzes voluntary municipal mergers in Finland. Our main focus is on aspects that have been somewhat neglected in prior empirical work: whether local democracy considerations, representation and voter preferences are involved in shaping the resulting municipal structure. The main results imply that some municipalities are forced to merge due to fiscal pressure and have to trade off political power to be accepted by their partners. The study also finds that the median voter's distance from services matters, while population size does not. The latter, somewhat surprising, observation is possibly explained by existing municipal co-operation, which already exhausts potential economies of scale.

The trade-off between equity and efficiency in population health gain: Making it real

2018 ◽  
Vol 212 ◽  
pp. 136-144 ◽  
Author(s):  
P. Sandiford ◽  
D. Vivas Consuelo ◽  
P. Rouse ◽  
D. Bramley
Keyword(s):  
Population Health ◽  
Health Gain ◽  
Trade Off ◽  
Equity And Efficiency

scholarly journals Budget Feasible Mechanisms on Matroids

Algorithmica ◽  
2020 ◽  
Author(s):  
Stefano Leonardi ◽  
Gianpiero Monaco ◽  
Piotr Sankowski ◽  
Qiang Zhang
Keyword(s):  
Polynomial Time ◽  
Private Information ◽  
Independent Set ◽  
Deterministic Algorithm ◽  
Matroid Intersection ◽  
Practical Applications ◽  
Incentive Compatible ◽  
The Cost ◽  
Special Case ◽  
Budget Feasible

AbstractMotivated by many practical applications, in this paper we study budget feasible mechanisms with the goal of procuring an independent set of a matroid. More specifically, we are given a matroid $${\mathcal {M}}=(E,{\mathcal {I}})$$ M = ( E , I ) . Each element of the ground set E is controlled by a selfish agent and the cost of the element is private information of the agent itself. A budget limited buyer has additive valuations over the elements of E. The goal is to design an incentive compatible budget feasible mechanism which procures an independent set of the matroid of largest possible value. We also consider the more general case of the pair $${\mathcal {M}}=(E,{\mathcal {I}})$$ M = ( E , I ) satisfying only the hereditary property. This includes matroids as well as matroid intersection. We show that, given a polynomial time deterministic algorithm that returns an $$\alpha $$ α -approximation to the problem of finding a maximum-value independent set in $${\mathcal {M}}$$ M , there exists an individually rational, truthful and budget feasible mechanism which is $$(3\alpha +1)$$ ( 3 α + 1 ) -approximated and runs in polynomial time, thus yielding also a 4-approximation for the special case of matroids.

A global game of diplomacy

2019 ◽  
Vol 31 (4) ◽  
pp. 480-506 ◽  
Author(s):  
Matt Malis ◽  
Alastair Smith
Keyword(s):  
Private Information ◽  
Learning Effect ◽  
Political Competition ◽  
Public Information ◽  
Selection Effect ◽  
Strengthening Effect ◽  
Global Game ◽  
The Public ◽  
Multiplier Effect ◽  
To Receive

Diplomacy always occurs in the shadow of domestic political competition. We develop a model of top-level diplomatic exchange between an incumbent and a foreign leader, embedded within a global game of regime change, and examine four mechanisms that induce a relationship between diplomatic visits and regime survival. First, the foreign leader chooses to visit incumbents who are ex ante more secure in office (a selection effect). Second, because the foreign leader’s decision is based partly on private information, the citizens update on the revelation of that information (a learning effect) and are discouraged from mounting a challenge. Third, the foreign leader can bolster the incumbent’s strength in office with a transfer of material support (a strengthening effect). The latter two effects are then amplified by the complementarities in the citizens’ strategies (a multiplier effect). Contrary to standard global games results, we show that increased precision in the public information transmitted strategically by the foreign power induces a unique equilibrium, as citizens coordinate on the foreign leader’s action. Our findings explain why leaders are so eager to receive state visits from major world powers.

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