International organizations and arrangements: Pivotal countries and manipulations

Dragan Miljkovic

Economic Modelling, 2009, vol. 26, issue 6, 1398-1402

Abstract: A problem of making an investment in a large developing or transition economy by an international organization is considered in this paper. We design a dominant strategy (the truth-telling) mechanism in a decision making problem where both Pareto optimality and optimization of an international organization's welfare are achieved. We determine that if there are pivotal countries within an international organization, necessary assumptions made for such a mechanism to work cannot be all satisfied. The mere presence of pivotal countries within an international organization is an empirical question, but casual empiricism suggests their existence.

Keywords: International; arrangements; Pivotal; countries; Dominant; strategy; Pareto; optimality (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:26:y:2009:i:6:p:1398-1402

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