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Heterogeneity gap in stable jurisdiction structures

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Working paper
Author/s: 
Anna Bogomolnaia, Michel Le Breton, Alexei Savvateev and Shlomo Weber
Journal of Public Economic Theory
Issue number: 
3
Series: 
Vol. 10
Publisher: 
Journal of Public Economic Theory
Year: 
2008
Journal pages: 
455–473
This paper examines a model of multijurisdiction formation where individuals' characteristics are uniformly distributed over a finite interval. Every jurisdiction locates a public facility and distributes its cost equally among the residents. We consider the notions of Nash and local Nash stability, and examine the existence and characterization of stable partitions. The main feature of this analysis is that, even under the uniform distribution, there are stable structures that exhibit a high degree of heterogeneity of jurisdictional sizes.
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