Strong tiebout equilibrium under restricted preferences domain

Abstract

We investigate the existence and give a partial characterization of a “strong Tiebout equilibrium” which consists of an endogenously formed partition of the individuals into disjoint jurisdictions with each jurisdiction producing and financing its own public goods, and moreover, there exists no group of individuals who can all benefit by establishing their own community. In particular, no single individual finds it desirable to migrate from his equilibrium jurisdiction. The existence proof makes use of the notion of “consecutive games” which we introduce and show that for such games there always exists a partition with a nonempty core.

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