Migration-Proof Tiebout Equilibrium: Existence and Asymptotic Efficiency

John Conley and Hideo Konishi

No 452, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: Tiebout's basic claim was that when public goods are local there is an equilibrium and every equilibrium is efficient. The literature seems fall short of verifying this conjecture: If the notion of equilibrium is too weak then equilibrium is nonempty yet some equilibria could be inefficient. On the other hand, if the notion of equilibrium is too strong, then every equilibrium is efficient yet equilibrium may be empty. This paper introduces a new equilibrium notion, a \textit{migration-proof Tiebout equilibrium}, which is a jurisdiction structure such that (i) no consumer wants to migrate unilaterally across jurisdictions (free mobility of consumers), and (ii) no subgroup of consumers want to form a new jurisdiction that would not create instability in population distribution (free entry of migration-proof jurisdictions). We show that there is always a unique migration-proof equilibrium and is asymptotically efficient when consumers are homogeneous.

Pages: 26 pages
Date: 2000-01-01, Revised 2000-12-01
New Economics Papers: this item is included in nep-mic
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Citations: View citations in EconPapers (1)

Published, Journal of Public Economics, 86, 241-260

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Related works:
Journal Article: Migration-proof Tiebout equilibrium: existence and asymptotic efficiency (2002)
Journal Article: Migration-proof Tiebout equilibrium:Existence and asymptotic efficiency (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:452

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