Events

Advanced Economic Seminars 161:Strategical Interactions on Municipal Public Safety Spending with Correlated Private Information

Publisher: Time:2016-11-28 15:30:00


Topic: Strategical Interactions on Municipal Public Safety Spending with Correlated Private Information

Lecturer:YANG Chao,Shanghai University of Finance and Economics

Time: 03:30pm-05:00pm, Dec.1(Thur),  2016

Venue: B423, Zhixin Building

Abstract: We investigate interactions of public safety spending among spatially related local jurisdictions in a framework of an incomplete information game both theoretically and empirically. Incorporating the mobility of residents and externality of public safety services, it is found that the public safety spending of a municipal government is negatively related to those of its neighbors, which is empirically supported by a general interaction model with correlated private information using the data on municipalities in North Carolina. In this case, when one of its neighbors increases its spending on public safety services by 1 million dollars, a municipal government will reduce its own expense by 0.1487 million dollars, showing strong ``free-riding'' effects.