Bulletin n. 1/2005 | ||
December 2005 | ||
Koppel Oliver |
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Reviewing Oates' insights in a repeated game setting | ||
in Economics of Governance , Volume 6, Number 3 , 2005 , 229 - 243 | ||
This paper analyzes the optimal assignment of public good policies to layers of a federal system in a repeated game setting. Under a centralized regime, public goods are financed jointly across regions, and a federal legislature decides on the regional quantities. Under a decentralized regime, public goods are financed locally, and governments play a non-cooperative provision game. We find that a centralized (decentralized) regime is more likely to provide the efficient public good policies in case spillovers are small (large). | ||