Narrow Results

This paper establishes an analytical framework for cooperative public choice games. In a cooperative public choice game under unanimity rule, all the players who belong to the only coalition will equally divide the cooperative payoff surplus, the equilibrium public choice is the one which can bring about the maximum cooperative payoff among all the public choices. In a cooperative public choice game under majority rule, compared with other public choices, the public choice with maximum comparative payoff will finally win the required majority of votes because of its greatest capability of attracting the intermediate team. When in a public choice game under majority rule there are more than two public choices which can bring about the maximum comparative payoff to the supporter coalition, the equilibrium choice will be the same one in the same public choice game under unanimity rule.

This paper introduces information asymmetry, cooperation and payoff compensation mechanism into public choice games, and establishes an analytical frame for information asymmetric cooperative public choice games. This paper examines the coalition formation and the distribution of the cooperative payoff under the equilibrium public choice (if it does exist) in an information asymmetric public choice game under unanimity rule and those in an information asymmetric public choice game under majority rule, respectively. Arrow [1951] and Sen [1970] assumed that there is no cooperation and payoff compensation mechanism in a public choice game, and showed that rational individuals with individual sovereignty could not reach consensus on any public choice. This paper shows that, even in a public choice game of information asymmetry, the cooperation and payoff compensation mechanism may lead to the coalition equilibrium, the achievement of equilibrium public choice, and the distribution equilibrium of cooperative payoff of the coalition which supports the equilibrium public choice, whether the public choice games are under unanimity rule or under majority rule.