Alexei Savvateev

Spontaneous (non) Emergence of Property Rights

The paper analyses preferences of private owners over the degree of property rights protection. It is shown that inequality in resource ownership and/or relative inefficiency of production technologies could make wealthier agents favour less than full protection of property rights. If such agents control the choice of a property rights regime, fully secured property rights will not emerge from the grassroots. This conclusion is consistent with the failure to create an efficient property rights system in Russia.

'Almost' Subsidy-Free Spatial Pricing in a Multi-Dimensional Setting

Consider a population of citizens uniformly spread over the entire plane, that faces a problem of locating public facilities to be used by its members. The cost of every facility is financed by its users, who also face an idiosyncratic private access cost to the facility. We assume that the facilities cost is independent of location and access costs are linear with respect to the Euclidean distance. We show that an external intervention that covers 0.19% of the facility cost is sufficient to guarantee secession-proofness or no cross-subsidization, where no group of individuals is charged more than its stand alone cost incurred if it had acted on its own. Moreover, we demonstrate that in this case the Rawlsian access pricing is the only secession-proof allocation.

Stability Under Unanimous Consent, Free Mobility and Core

In this paper, we consider a population represented by a continuum of individuals uniformly distributed over the unit interval that faces a problem of location and financing of public facilities under the equal share rule. We examine three notions of stability of emerging jurisdiction structures (stability under unanimous consent, free mobility and core) and provide a characterization of stable structures.

Stability and fairness in models with a multiple membership

This article studies a model of coalition formation for the joint production (and finance) of public projects, in which agents may belong to multiple coalitions. We show that, if projects are divisible, there always exists a stable (secession-proof) structure, i.e., a structure in which no coalition would reject a proposed arrangement. When projects are indivisible, stable allocations may fail to exist and, for those cases, we resort to the least core in order to estimate the degree of instability. We also examine the compatibility of stability and fairness in metric environments with indivisible projects, where we also explore the performance of well-known solutions, such as the Shapley value and the nucleolus.

The Egalitarian Sharing Rule in Provision of Public Projects

In this note we consider a society that partitions itself into disjoint jurisdictions, each choosing a location of its public project and a taxation scheme to finance it. The set of public project is multi-dimensional, and their costs could vary from jurisdiction to jurisdiction. We impose two principles, egalitarianism, that requires the equalization of the total cost for all agents in the same jurisdiction, and efficiency, that implies the minimization of the aggregate total cost within jurisdiction. We show that these two principles always yield a core-stable partition but a Nash stable partition may fail to exist.

Gale–Nikaido–Debreu and Milgrom–Shannon: Communal interactions with endogenous community structures

This paper examines a model of market interactions with a continuum of agents whose characteristics are distributed over the unidimensional interval. The society is endogenously partitioned into several communities, whose members are engaged in costly market interactions. The interaction or communication costs between every pair of agents depend on their identity and the size and composition of community to which they belong. By using the celebrated Gale-Nikaido-Debreu Lemma and invoking the Kantorovich continuity over agents distributions, we prove that there exists a partition of the society into a given number of connected intervals which satisfies the Border Indifference Property (BIP). Namely, individuals on the border of each community are indifferent between joining either of the adjacent communities. We demonstrate that while BIP does not, in general, yield Nash equilibria, the equilibrium existence is erescued under the Milgrom-Shannon (1994) monotone comparative statics conditions.

Multiple Membership and Federal Sructures

We consider a model of the “world with several regions that may create a unified entity or be partitioned into several unions (countries). The regions have distinct preferences over policies chosen in the country to which they belong and equally share the cost of public policies. It is known that stable political maps or country partitions, that do not admit a threat of secession by any group of regions, may fail to exist. To rectify this problem, in line with the recent trend for an increased autonomy and various regional arrangements, we consider federal structures, where a region can simultaneously be a part of several unions. We show that, under very general conditions, there always exists a stable federal structure.

An Evolutionary Explanation for the Propensity to Migrate

We explore the evolutionary dynamics of a population that consists of cooperators and defectors, wherein each member of the many pairs of players of a one-shot prisoners dilemma game is drawn at random, and the number of descendents positively depends on the payoffs in the game. We demonstrate how an inclination to migrate may be mapped onto the overall evolutionary fitness of the cooperators. The threshold value of the inclination to migrate parameter is obtained. Intensities of migration higher than that value guarantee that in the long run, the population will consist entirely of cooperators. The threshold value is characterized by the payoff parameters lying at the base of the evolutionary dynamics.