Discussion paper

DP3465 How to Win a Decision in a Confederation

This Paper deals with collective decision making within a group of independent jurisdictions. The right to choose the public policy is delegated from the central authority of one of the jurisdictions through a bidding procedure among the group members. We identify the following trade-off: competition among jurisdictions yields higher transfers to the government, but the outcome tends to be less efficient than what it is when jurisdictions negotiate prior to the decision-making process. We extend and illustrate the model by means of a public good game involving several heterogeneous jurisdictions.


Thisse, J and P Jehiel (2002), ‘DP3465 How to Win a Decision in a Confederation‘, CEPR Discussion Paper No. 3465. CEPR Press, Paris & London. https://cepr.org/publications/dp3465