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

Stefan Ambec and Yann Kervinio

No 14-480, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We consider the decentralized provision of a global public good with local external- ities in a spatially explicit model. Communities decide on the location of a facility that benefits everyone 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 ("Not In My Back-Yard") problem. We derive and discuss conditions for core solutions to exist. These conditions are driven by the temptation to exclude groups of neighbors at any potential location. We illustrate the results in different spatial settings. In particular, we construct a hypothetical example on a real administrative unit in which the core is shown to be empty. These results clarify how property rights can affect cooperation and shed further light on a limitation of the Coase theorem.

Keywords: NIMBY; externality; Coase theorem; pollution; waste; core; cooperative game; spatial model (search for similar items in EconPapers)
JEL-codes: C71 D62 Q53 R53 (search for similar items in EconPapers)
Date: 2014-03
New Economics Papers: this item is included in nep-cdm, nep-env, nep-geo, nep-gth and nep-ure
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Journal Article: Cooperative decision-making for the provision of a locally undesirable facility (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:28041

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