At a Nash - Walras equilibrium, individuals exchange commodities competitively, and, simultaneously, they interact strategically. Under standard assumptions, NashWalras equilibria exist, equilibrium profiles of actions are, typically, determinate but Pareto suboptimal, though not constrained...

Consider a population of citizens uniformly spread over the entire plane, that faces a problem of locating public facilities to be used by its members. The cost of every facility is financed by its users, who also face an idiosyncratic private access cost to the facility. We assume that the...

Profit maximization is not a well defined objective when markets are incomplete. Several criteria of investment choice have therefore been put forward in the literature, some of which crucially hinge upon aggregation of shareholders' preferences, as is the case with the criteria proposed by...

This paper examines a model of multi-jurisdiction formation where individuals' characteristics are uniformly distributed over a finite interval. Every jurisdiction locates a public facility and distributes its cost equally among the residents. We consider two notions of stability: Nash...

This paper presents a model of nation formation in which culturally heterogeneous agents vote on the optimal level of public spending. Larger nations benefit from increasing returns in the provision of public goods, but bear the costs of greater cultural heterogeneity. This tradeoff induces...

We consider a political economy model of country whose citizens have heterogeneous preferences for a national policy and some regions may contemplate a threat of secession. The country is efficient if its break-up into smaller countries leads to aggregate utility loss. We show that in an...

In this paper we examine compensation schemes that prevent a threat of secession by all country's regions and in the same time provide no incentives for citizens' migration within the country. We prove that, under quite general assumptions on the distribution of citizens' preferences, there...

In this paper we consider an urban population represented by a continuum of individuals uniformly distributed over the real line that faces a problem of location and financing of multiple public facilities. We examine three notions of stability of emerging jurisdiction: stability under...

When n individuals satisfy the axioms of subjective expected utility (SEU) theory and these individuals' probabilities or/and utilities are sufficiently diverse, it is impossible to aggregate the individuals' preferences into a (n + 1)-preference which is both Paretian and in agreement with SEU...

We establish the precise connections between progressive taxation and inequality reduction, in a setting where the level of tax revenue to be raised is endogenously fixed and tax schemes are balanced. We show that, in contrast with the traditional literature on taxation, the equivalence between...