We demonstrate that an interregional policy scheme featuring trading of carbon dioxide emissions, redistributive resource transfers and global participation, a scheme which we call 'Ideal Kyoto Protocol', yields an efficient equilibrium allocation for a global economy. An altruistic...

We analyze a model of resource allocation in a federal system in which the center transfers real resources between member states. The center is assumed to be unable to observe the precise value of the cost differences across jurisdictions that motivate the transfers. Moreover, the center cannot...

Bergstrom has shown that Becker's "Rotten Kid theorem" holds in a world of two commodities if their utilities are transferable. The present paper identifies a further circumstance in which the theorem is valid. We show that it also holds in the absence of transferable utility if the...