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Inefficiency and Self-Determination: Simulation-Based Evidence From Meiji Japan

Eric Weese (), Masayoshi Hayashi and Masahi Nishikawa
Additional contact information
Masahi Nishikawa: Aoyama Gakuin University

Working Papers from Economic Growth Center, Yale University

Abstract: Does the exercise of the right of self-determination lead to inefficiency? This paper considers a set of centrally planned municipal mergers during the Meiji period, with data from Gifu prefecture. The observed merger pattern can be explained as a social optimum based on a very simple indiidual utility function. If individual villages had been allowed to choose their merger partners, counterfactual simulations show that the core is always non-empty, but core partitions contain about 80% more (post-merger) municipalities than the social optimum. Simulations are possible because core partitions can be calculated using repeated application of a mixed integer program.

Keywords: Municipal mergers; one-sided matching; moment inequalities; mixed integer programming; Gifu (search for similar items in EconPapers)
JEL-codes: C63 C71 H77 K33 N95 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp
Date: 2015-08
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Related works:
Working Paper: Inefficiency and Self-Determination: Simulation-based evidence from Meiji Japan (2016) Downloads
Working Paper: Inefficiency and Self-Determination: Simulation-Based Evidence From Meiji Japan (2015) Downloads
Working Paper: Inefficiency and Self-Determination: Simulation-based Evidence from Meiji Japan (2015) Downloads
Working Paper: Inefficiency and Self-Determination: Simulation-based Evidence from Meiji Japan (2015) Downloads
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