Fan-chin Kung

Bifurcations in regional migration dynamics

The tomahawk bifurcation is used by Fujita et al. [Fujita, M., Krugman P., Venables A.J., 1999, The Spatial Economy: Cities, Regions, and International Trade, MIT Press: Cambridge, MA.] in a model with two regions to explain the formation of a core-periphery urban pattern from an initial uniform distribution. Baldwin et al. [Baldwin, R., Forslid, R., Martin, P., Ottaviano, G.I.P., Robert-Nicoud, F., 2003, Economic Geography and Public Policy, Princeton University Press: Princeton, NJ.] show that the tomahawk bifurcation disappears when the two regions have an uneven population of immobile agricultural workers. Thus, the appearance of this type of bifurcation is the result of assumed exogenous model symmetry. We provide a general analysis in a regional model of the class of bifurcations that have crossing equilibrium loci, including the tomahawk bifurcation, by examining arbitrary smooth parameter paths in a higher dimensional parameter space. We find that, in a parameter space satisfying a mild rank condition, generically in all parameter paths this class of bifurcations does not appear. In other words, conclusions drawn from the use of this bifurcation to generate a core-periphery pattern are not robust.

The indeterminacy of equilibrium city formation under monopolistic competition and increasing returns

We study the indeterminacy of equilibrium in the Fujita-Krugman (1995) model of city formation under monopolistic competition and increasing returns. Both the number and the locations of cities are endogenously determined. Assuming smooth transportation costs, we examine equilibria in city-economies where a finite number of cities form endogenously. For any positive integer K, the set of equilibria with K distinct cities has a smooth manifold of dimension K-1 as its interior for almost all parameter values in a regular parameterization. The disjoint union of these sets over all positive integers K constitutes the entire equilibrium set.

Sorting out single-crossing preferences on networks

We extend the single-crossing property to tree networks to facilitate its application in network games. It is equivalent to intermediate preferences and order restriction (also extended to networks). Moreover, to facilitate broader applications in real world cases and simulations, we develop algorithms that answer the following two questions. Given a preference profile, can we construct a tree graph that supports single-crossing? Given a set of alternatives, can we generate single-crossing preference profiles with associated tree graphs?

Fundamental Non-convexity and Externalities: A Differentiable Approach

It is well known that externalities cause fundamental non-convexity problems in the production set. We demonstrate that the differentiable approach is a proper tool. Existence of equilibrium obtains without requiring aggregate convexity in consumption or production. Our model allows general externalities in consumption and production and also price dependency.

Coalition formation with local public goods and group-size effect

Many public goods that are provided by coalitions have a group-size effect. Namely, people prefer to consume a public good in a larger coalition. This paper studies local public goods games with anonymous and separable group-size effect. The core is nonempty when coalition feasible sets are monotonic and players’ preferences over public goods satisfy a condition called cardinal connectedness. Moreover, a core allocation consists of connected coalitions.

Sorting Out Single-Crossing Preferences

We extends the single-crossing property of preferences to tree graphs, and show that it is equivalent to intermediate preferences and order restriction, also extended to tree graphs. Moreover, to facilitate the use of single-crossing in network games, we develop algorithms to answer the following questions. Given a preference profile, can we construct a tree graph that supports single-crossing, if it is? Given a set of alternatives, can we generate single-crossing preference profiles with associated tree graphs?

Public Good Coalitions and Membership Exclusion

Many local public goods are provided in coalitions. When coalitions form they may have the power to exclude members. The core applies to such cases. When coalitions cannot exclude members, all who prefer the provided public good can join. The no-exodus equilibrium is proposed for such cases. It is an extension of the Tiebout equilibrium in the long run when the number of coalitions can vary and membership exclusion is not granted.