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<article xmlns:xlink="http://www.w3.org/1999/xlink">
  <front>
    <journal-meta>
      <journal-title-group>
        <journal-title>October</journal-title>
      </journal-title-group>
    </journal-meta>
    <article-meta>
      <title-group>
        <article-title>When Laziness Leads to Stability: Approximate Equilibria in One-Dimensional Jurisdiction Formation Models</article-title>
      </title-group>
      <contrib-group>
        <contrib contrib-type="author">
          <string-name>Andrei Golman</string-name>
          <xref ref-type="aff" rid="aff1">1</xref>
        </contrib>
        <contrib contrib-type="author">
          <string-name>Daniil Musatov</string-name>
          <xref ref-type="aff" rid="aff0">0</xref>
          <xref ref-type="aff" rid="aff1">1</xref>
          <xref ref-type="aff" rid="aff2">2</xref>
        </contrib>
        <aff id="aff0">
          <label>0</label>
          <institution>Caucasus Mathematical Center at Adyghe State University</institution>
          ,
          <addr-line>ul. Pervomaiskaya, 208, Maykop, 385000</addr-line>
          ,
          <country country="RU">Russia</country>
        </aff>
        <aff id="aff1">
          <label>1</label>
          <institution>Moscow Institute of Physics and Technology (National Research University)</institution>
          ,
          <addr-line>9 Institutskiy per., Dolgoprudny, Moscow Region, 141701</addr-line>
          ,
          <country country="RU">Russia</country>
        </aff>
        <aff id="aff2">
          <label>2</label>
          <institution>Russian Academy of National Economy and Public Administration</institution>
          ,
          <addr-line>pr. Vernadskogo, 84, Moscow, 119606</addr-line>
          ,
          <country country="RU">Russia</country>
        </aff>
      </contrib-group>
      <pub-date>
        <year>2020</year>
      </pub-date>
      <volume>2</volume>
      <fpage>2</fpage>
      <lpage>24</lpage>
      <abstract>
        <p>In this paper, we discuss the question of approximate stability in group partition (Alesina-Spolaore-like) models. Consider a world with a finite number of agents living along a line. The coordinate may represent a location in some geographical or virtual space. A subgroup of agents may build a facility at some point and enjoy benefits from it. Each facility costs some amount  , and every agent pays for her transportation. These costs may be somehow redistributed. We seek for a stable division of the whole society into subgroups. Two main stability concepts are considered. Migrational stability means that no individual may decrease his cost by changing the group. Coalitional stability means that no new group may emerge and decrease the costs of all its members. We relax these concepts: an individual must substantively decrease her cost in order to break the structure, otherwise the change is not worth it. It was shown by Bogomolnaia et al that for some rules there are no stable configurations. We try to maximize the approximation rate for which the counterexamples still exist. Specifically, we study three cases: coalitional stability without redistribution, migrational stability with the central median rule and migrational stability with Rawlsian redistribution. We found the worlds with instability 6.2%, 2.5% and 9.6% respectively. In the first case we prove that this is the maximal rate for all bipolar worlds.</p>
      </abstract>
      <kwd-group>
        <kwd>eol&gt;Facility location</kwd>
        <kwd>group partition</kwd>
        <kwd>coalitional stability</kwd>
        <kwd>migrational stability</kwd>
        <kwd>approximate equilibrium</kwd>
      </kwd-group>
    </article-meta>
  </front>
  <body>
    <sec id="sec-1">
      <title>1. Introduction</title>
      <sec id="sec-1-1">
        <title>Every person in a society belongs to many groups and communities. For some specific relations,</title>
        <p>the groups must be disjoint. For instance, in the USA a citizen may be a registered supporter of
only one political party. In many countries a person must have a unique address of residence, thus
the municipalities or regions may be treated as non-intersecting communities. If a group of tourists
choose where to go on a particular day, then everyone may choose only one excursion.</p>
      </sec>
      <sec id="sec-1-2">
        <title>What is the rationale behind forming groups (communities, clubs, coalitions, jurisdictions etc.)?</title>
      </sec>
      <sec id="sec-1-3">
        <title>Why people cannot just live alone? The answer is that some valuable goods are either impossible or too costly to produce by a single agent. Thus, people unite themselves into clubs in order to provide such club goods. But organizing a club is costly, and the members may disagree with each other about the type and quantity of the provided club goods. Sometimes there could be congestion issues: the</title>
        <p>club good deteriorates when the number of users rises. This is why there could be no grand coalition,
but some coalitional structure.</p>
        <p>In this paper we study the question of horizontal diferentiation . The club good has some features
and all agents have preferences over them. The cost of organizing a club and providing the club good
is constant and does not depend on the number of users. Thus, there are two opposite forces. On the
one hand, large groups are better since they provide economy of scale. Each member pays less share
of the total cost. On the other hand, small (and homogeneous) groups are better since they can tune
the features of the good precisely under members’ preferences. The main question is whether these
forces can always equilibrate each other. And how do details of the model influence the answer?</p>
      </sec>
      <sec id="sec-1-4">
        <title>Two main equilibrium concepts appear in the literature. Migrational stability means that no indi</title>
        <p>vidual wishes to change her community unilaterally in order to reduce her costs. Coalitional stability
suggests that no group of agents would like to secede from the club system, organize a new club and
thus reduce the costs of all members. The distribution of agents may be described in diferent ways.</p>
      </sec>
      <sec id="sec-1-5">
        <title>Firstly, the underlying feature space may be of diferent dimensions. Secondly, the distribution itself</title>
        <p>may be of three types. It may be discrete, when a finite set of agents live at some specific points.</p>
      </sec>
      <sec id="sec-1-6">
        <title>It may be continuous, when a continuum of agents live according to some density. And it may be</title>
        <p>atomic, when a continuum of agents live at a finite number of points. The costs may be redistributed
between the agents in some way: usually, less satisfied agents may be subsidized or pay a less share
of the fixed cost. The combinations of these specifications lead to a family of models. In some of them
an existence theorem may be proven. In some others an example without a stable partition may be
constructed.</p>
        <p>This study considers the frameworks without an equlibrium. We relax the notions of stability:
suppose that a threatening individual or group must not only get better after the change, but decrease
their costs by a considerable amount. Of course, if this amount is large enough, the stable
configuration will always exist. Our research question is to find the maximal size of this amount when the
configuration is still unstable. We consider three uni-dimensional frameworks:
• Coalitional stability without cost redistribution;
• Migrational stability without cost redistribution;
• Migrational stability with egalitarian redistribution.</p>
      </sec>
      <sec id="sec-1-7">
        <title>In each case we find the most unstable world in some family. We do not know whether our examples are the furthest from stability globally, but we provide some evidence in favour of this conjecture.</title>
        <sec id="sec-1-7-1">
          <title>1.1. Related literature</title>
        </sec>
      </sec>
      <sec id="sec-1-8">
        <title>In this subsection we describe some previous studies in the areas of club goods, facility location and</title>
        <p>group partition.</p>
        <p>
          The discussion about local public goods started in the 1950s. Samuelson [1] presented a model
that demonstrated ineficiency of decentralized public good provision. The main idea was that the
freerider problem is inevitable. If an agent buys a public good by himself, then he cares only about his
own benefits, not about the others. This is why it will be always underfinanced. Tiebout [
          <xref ref-type="bibr" rid="ref1">2</xref>
          ] agreed
that this is the case for the whole economy, but stated that the situation with local public goods is
diferent. There is an option to change the jurisdiction, or to “vote by feet”. This move simultaneously
changes the tax level and the characteristics of the provided public good, so one may hope to obtain
an equilibrium.
        </p>
      </sec>
      <sec id="sec-1-9">
        <title>Tiebout’s paper lacked a formal model. This is why the successive studies tried to formalize</title>
        <p>Tiebout’s intuition. In particular, the researchers tried to justify the existence and eficiency of the
suggested equilibrium. The early endeavours included the papers by Westhof [3] and Bewley [4]. A
thorough analysis was done by Greenberg and Weber [5] who introduced the notions of migrational
and coailitional stability and justified both of them by quotes from the Tiebout’s paper. All these
eforts were done in the framework of vertical diferentiation: the good was homogeneous, but the
agents difered in willingness to pay for it and were self-selecting in jurisdictions with diferent levels
of public good.</p>
      </sec>
      <sec id="sec-1-10">
        <title>The notion of horizontal diferentiation was brought to the field by the seminal paper of Alesina</title>
        <p>and Spolaore [6]. They introduced a one-dimensional parameter that describes both the local public
good and the agents’ preferences. They interpreted the model in the spirit of political science: the
parameter describes a geographical location, the coalitions are nations and the facilities are their
capitals. Each citizen pays taxes to finance the capital and needs to visit it sometimes. The paper also
considered the concepts of migrational and coalitional stability.</p>
      </sec>
      <sec id="sec-1-11">
        <title>In the next decades many variations and generalizations of the model were considered in vari</title>
        <p>ous papers. In particular, the issues of nonuniform density or discrete configuration, various cost
redistribution rules and multiple dimensions were studied. In some frameworks it was shown that
an equilibrium does always exist, in other cases very involved counterexamples were constructed.</p>
      </sec>
      <sec id="sec-1-12">
        <title>Haimanko et al [7] show that if any redistribution may be applied, then a coalitionary stable partition</title>
        <p>does always exist. Weber et al [8] present an example where no migrational equilibrium may exist
under the egalitarian redistribution rule. Bogomolnaia et al [9], [10] and Savvateev [11] studied discrete
models with a finite number of agents and presented several examples in diferent frameworks where
no equilibrium exists. On the other hand, Musatov et al [12], Savvateev et al [13] and Marakulin [14]
presented rather general existence theorems in the continuous framework.</p>
      </sec>
      <sec id="sec-1-13">
        <title>The concept of approximate stability was employed in the two-dimensional analysis by Drèze et al [15]. It was later elaborated by Golman and Musatov [16]. This paper expands the results obtained there.</title>
        <sec id="sec-1-13-1">
          <title>1.2. Roadmap</title>
        </sec>
      </sec>
      <sec id="sec-1-14">
        <title>The remaining part of the paper is organized as follows. In Sect. 2 a detailed formal model is pre</title>
        <p>sented, including the definitions of approximate stability. In Sect. 3 we extensively analyze the case
of coalitional stability of a bipolar world. In Sect. 4 and Sect. 5 we present a preliminary analysis of
migrational stability in two settings: egalitarian redistribution and the central median rule. Finally,</p>
      </sec>
      <sec id="sec-1-15">
        <title>Sect. 6 presents a conclusion.</title>
      </sec>
    </sec>
    <sec id="sec-2">
      <title>2. The model</title>
      <sec id="sec-2-1">
        <title>2.1. General setting</title>
        <sec id="sec-2-1-1">
          <title>Here we formulate a model of jurisdiction formation in a linear world with a finite number of agents.</title>
          <p>This model is similar to the models in [9] and [8]. A continuous model may be found, for instance,
in [12]. In our model we have an agent set  = {1, … ,  }. Every agents  “lives” at location   , where
 1 ≤ ⋯ ≤   . A community  is a nonempty subset of  . It may build a facility at some point  . We
consider two possible rules of determining  :
• The median rule. The point  is a median of  , i.e., the sets { ∣   ≤  } and { ∣   ≥  } must
have equal sizes. If  contains an even number of agents and there is a segment of medians,
then any median will fit.</p>
          <p>middle point of this segment is chosen.</p>
          <p>• The central median rule. The same as before, but if there is a segment of medians, than the</p>
        </sec>
        <sec id="sec-2-1-2">
          <title>Any median point has two features. Firstly, if the transportation cost function is linear, then a</title>
          <p>median location minimizes the total cost. Secondly, it wins over any other option by majority voting.
the set of suitable medians under the specified rule. It will be either a segment or a singleton.
The central median rule, moreover, always returns a unique point. In the sequel we denote by med( )
two rules of distributing the total cost:</p>
        </sec>
        <sec id="sec-2-1-3">
          <title>If a jurisdiction is established, then all its members may use its facility. There is no congestion, so</title>
          <p>the cost of maintenance does not depend neither on the number of users, nor on the location of the
facility. Denote this cost by  . Apart of this cost, all members should be transported to the location.
The transportation cost of an agent at point  to the facility at point  equals  ⋅ | −  |. We consider
• The private cost rule. Every agent pays for himself, so the total cost of agent  within coalition
 with facility at  equals
where | | is the cardinality of  .
• The Rawlsian (egalitarian) rule. The total cost is redistributed such that every agent pays an
equal share. Here we have the following cost function:
1
| |

| |
  (, , 
) =</p>
          <p>+  ⋅ |  −  |,
  (, , 
) =
( +  ∑ |  −  |).</p>
          <p>∈
notation.
 1, … ,</p>
          <p>. We analyze the following notions of stability:
Note that under the central median rule the facility is uniquely located, so we can omit  in the
Suppose that the whole society is divided into communities  1, … ,   with facilities at medians
• Migrational (or Nash) stability. No individual wishes to change his community. Formally, for
every agent  belonging to community</p>
          <p>and any other community   it holds that
 (,   ) ≤  (,   ∪ { }).
defined, or can be chosen arbitrarily among possible variants.</p>
          <p>Note that agent  anticipates that she would change the community she joins and the
distribution of costs within it. The existing members of   may become better of or worse of, it does
not matter. The median of   is predetermined, and the median of   ∪ { } is either uniquely
communities</p>
          <p>and all agents  ∈  ∩   it holds that
• Coalitional (or core) stability. No group of agents wish to establish a new community such that
all members become better of. Formally, there is no set  with a median  such that for all
 (, ,</p>
          <p>) &lt;  (,   ,   ),
where   is the median of   .</p>
          <p>Note that migrational and coalitional notions of stability are incomparable. Namely, if an individual
changes the jurisdiction, then the old members of the new jurisdiction may become worse of due to
the change of the median. Thus, they would not like to admit the new member. Thus, this change
would be a threat for migrational stability but not for coalitional stability. Vice versa, it may occur
that no individual move may decrease the cost, but a collective change may decrease the costs of all
participants.</p>
        </sec>
      </sec>
      <sec id="sec-2-2">
        <title>2.2. Approximate notions of stability</title>
        <p>Suppose that changing the jurisdiction or establishing a new one is costly: for instance, it takes some
efort for negotiation. In this case a structure would be unstable only if some change may substantively
decrease the cost of all involved agents. We consider two measures of instability:
• Absolute, or additive, instability. A threat is credible only if all agents performing the move
order to compare diferent unstable societies with each other.</p>
        <p>decrease their costs by some absolute value  . Of course, the scale should be fixed somehow in
• Relative, or multiplicative, instability. A threat is credible only if all agents performing the move
decrease their costs by some fraction  . This definition does not depend on the scale.</p>
        <sec id="sec-2-2-1">
          <title>Now let us put it formally.</title>
          <p>(⋅)). Now define two measures of absolute instability of a group structure:
Definition 1.
 1, … ,   , respectively. Denote by  ( ) the community that contains agent  and by  ( ) the respective
median. Denote by  (,  ) the cost of  in  , i.e.  (, 
( ),  ( )). (Where  (⋅) denotes either   (⋅) or
Consider a society structure  , i.e. a partition 
=  1 ⊔ ⋯ ⊔   with facilities at points
• The absolute migrational instability of the structure is the value
• The absolute coalitional instability of the structure is the value
Δ
 ( ) = max( (,  ) −

 ∈
min
 =1,…,
 ∈med(  ∪{ })</p>
          <p>(,   ∪ { },  ));
Δ
 ( ) =

 ⊂,
≠∅, ∈med( ) m∈in( (,  ) −  (,  , 
max
)).</p>
        </sec>
        <sec id="sec-2-2-2">
          <title>Note that all instability measures are always non-negative: the status quo costs lie in the range of minimization, so the zero diference is achievable. It should be also clear that the instability is zero if and only if the structure is stable. We proceed by defining the relative measures.</title>
          <p>Definition 2.
relative instability:</p>
          <p>Keep all the notation from the previous definition. Define the following measures of
• The relative migrational instability of the structure is the value
• The relative coalitional instability of the structure is the value
Δ ( ) = max

 ∈
 (,  ) − min</p>
          <p>(,   ∪ { },  )
 =1,…,
 ∈med(  ∪{ })
 (, </p>
          <p>)
Δ ( ) =

 ⊂,
≠∅, ∈med( )  ∈
max
min
 (,  ) −  (,  , 
 (, 
)
)
We call the structure  -stable in some sense, if its instability in this sense is not greater then  .</p>
          <p>Note that instead of taking the maximin of  (, )− (, , ) we may take the minimax of   (,(,, ) ) . Later
we refer to this value as to the new-to-old ratio.  (, )</p>
        </sec>
        <sec id="sec-2-2-3">
          <title>Our general question is the following:</title>
          <p>Problem 1. Find the least upper bounds on Δ( 1, … ,   ) in diferent variations. Which worlds are the
least stable under which rules? And which rules produce the least stable worlds?</p>
          <p>Partial solutions to this problem include computing the values of Δ( 1, … ,   ) for particular worlds,
ifnding parameters with large instability, establishing some upper bounds and exact solution for some
families of worlds (for instance, parametric).</p>
        </sec>
      </sec>
    </sec>
    <sec id="sec-3">
      <title>3. Approximate coalitional stability</title>
      <p>This question was previously studied by the last two authors in [16]. That paper was focused on
bipolar worlds, where the agents live in just two points. It was found out that the least absolutely stable
configuration is the one with 3 agents at one point and 4 agents at another point. For cost parameters
 =  = 1 the distance is 254 ≈ 0.208. The analysis of relative instability was done numerically. It
was shown that the maximal possible relative instability is somewhere between 0.061 and 0.063. In
this paper we provide an exact solution and prove that the maximal instability in a bipolar world is
(asymptotically) √65 − 8 ≈ 0.0622. Our conjecture is that this bound holds for any world.</p>
      <sec id="sec-3-1">
        <title>3.1. Group structures in a bipolar world</title>
        <p>Consider a bipolar world with  agents at point 0 and  agents at point  . W.l.o.g. we postulate that
 =  = 1 and  ≤  . It is also instrumental to think that the weight of a single agent is 1 , so the total
weight of the left agents is 1 and the total weight of the right agents is  =  ≥ 1. We co nsider several
specific structures.</p>
        <p>Definition 3.</p>
        <p>• Union is the structure with one grand coalition and the facility at point  .
• Federation is the structure with two coalitions: the left coalition with all agents at 0 and the
right coalition with all agents at  .
• Mixed structure is a structure where one coalition includes equal number of agents from both
poles and has a facility somewhere in between (we call such a coalition ambiguous). Among
those structures we consider the MaxAmbigs, where one coalition includes a unit weight of
agents from each pole and the other contains agents of weight  − 1 from the right. The former
coalition will be also referred to as the MaxAmbig. These atructures are parameterized by the
facility position  ∈ [0,  ].
• Pseudofederation is a structure where one coalition includes all agents from one pole and some
agents from the other, and the second coalition is formed by the remaining agents of the other
pole. We distinguish right pseudofederations where the first coalition includes all agents from the
right and left pseudofederations where it includes all agents from the left. All pseudofederations
may be parameterized by a single parameter  ∈ (−1,  ). If  &lt; 0, then the dispersed coalition
consists of | | agents from the left and  agents from the right. If  &gt; 0, then it consists of
mass-1 agents from the left and  agents from the right. In case  = 0 the structure turns into
the Federation. In case  ∈ {−1,  } the structure becomes the Union.</p>
        <sec id="sec-3-1-1">
          <title>Of course, this list is not exhaustive. In particular, some structures may contain three or more coali</title>
          <p>tions. We claim that the most stable configuration may be of one of three types: Union, MaxAmbig
or Pseudofederation( ) where  ∈ [0,  − 1]. In the sequel we prove this assertion and find the world
where the relative instability of these structures is maximal. In fact, we proceed in the opposite way.</p>
        </sec>
        <sec id="sec-3-1-2">
          <title>Firstly, we maximize the instability of the three types of partition over all possible worlds. Then we show that the instabilities of all other structures of this specific world are even greater.</title>
        </sec>
      </sec>
      <sec id="sec-3-2">
        <title>3.2. Analysis of the three main structures</title>
        <p>It was shown by Savvateev [17] that in an unstable structure it must hold that  &gt; 0.5,  &lt; 1.62,
 &lt;  + 1 and  &lt; 1 (the exact bounds are tighter, but these are enough for us). In the sequel we
take these bounds as granted. Now consider all credible threats for each structure and calculate the
new-to-old ratios for them.</p>
        <p>Lemma 1. If the Union is unstable, then the set of all left agents wins the most from the secession.</p>
        <sec id="sec-3-2-1">
          <title>Proof. Indeed, all right agents have the smallest possible cost in the Union. So only a coalition of left</title>
          <p>agents may want to secede. But the cost is the least possible in the coalition of all left agents. So this
set has the maximal willingness to secede.</p>
          <p>Note that the new-to-old ratio is 1/ ( 1+ +  ).</p>
          <p>1
Lemma 2. Let Pseudofederation( ), where  ∈ [0,  − 1], be unstable. If the Union is also unstable, then
the group that wins the most from the secession is either the MaxAmbig group or the set of all right agents.
Proof. Recall that  &gt; 0 means that there is a group with all agents from the left and some agents from
the right. Suppose that some group with the center on the left wins from the secession. Since the left
agents are better of, the group must be larger then the initial left group. If all left agents join the
group, they are even better of. Some agents from the right must also be in that group and be better
of. Thus, the right agents will join the seceding group until the center is still at 0. So, the limit case
is the MaxAmbig group.</p>
        </sec>
        <sec id="sec-3-2-2">
          <title>Similarly, if some ambiguous group is a credible threat, then it must be larger than the initial left</title>
          <p>group. Thus it must include agents from the right group and the MaxAmbig group is a greater threat.</p>
        </sec>
        <sec id="sec-3-2-3">
          <title>If some group with the center on the right is a credible threat, then it will be more credible when</title>
          <p>expanded to the whole right pole. If there were some agents from the left, then the grand coalition
will be a greater threat again. But we assume that the Union is unstable, so the set of all left agents
reduces the costs after seceding from the Union. By transitivity, it means that the left pole becomes
better of when seceding from the Pseudofederation, which is a contradiction.</p>
        </sec>
        <sec id="sec-3-2-4">
          <title>The analysis of the new-to-old ratio is more complex here. We should maximize the ratio over all</title>
          <p>possible threats and all agents participating in a threat. Consider two possibilities:
• MaxAmbig threat with median  . Here the agents from the left compare the new cost 12 + to the
tohldatcwositth1+1o u.rTphaeraamgeentetsrsfrtohmeltahtteerriigshgtrceoamteprathrean21 +th e−f ortmoeeri,tshoerw e−1shooruld1 maximizes the ratios
1+ +  . It can be shown
Plugging this back to the ratios, we get the value (1+ )(1+ )( − ) .
1+
211++1  and 21 +−1 − . Since the first ratio grows with  and the second one decreases, the maximum
of them is the largest when they are equal. Solving the equation, we get  = 21 +  − (1+ )(1+ ) .
1+
• The right pole threat. Here the agents from the undivided coalition compare 1 to 1 and the
new-to-old ratio is max 1 −  ,  (1+ + )</p>
          <p>1+
{
}</p>
          <p>.</p>
          <p>agents from the right part of the dispersed coalition compare 1 to 1</p>
        </sec>
        <sec id="sec-3-2-5">
          <title>Minimization of the maximal new-to-old ratio yields the following result:</title>
          <p>1+ +  . Th us t h−e maximal
Lemma 3. The minimax of the new-to-old ratio in a Pseudofederation( ) is achieved when 
The minimum is reached simultaneously for the right pole threat and for the MaxAmbig threat
=  (1+ )
1− .
with
 = 21 +  − (1+ )(1+ ) . The corresponding new-to-old ratio is 1 −  21(−1+ )
1+
.</p>
        </sec>
        <sec id="sec-3-2-6">
          <title>Proof sketch. The proof is rather straightforward, but technical, so we present only the general direc</title>
          <p>tion. It can be shown that MaxAmbig is the most credible threat for  close to 0 and for  close to  − 1
and the right pole is the most credible for the intermediate values of  . Thus, the value of the most
credible threat has two local peaks. It can be checked that the left one is higher and corresponds to
the claimed values of  and  .</p>
        </sec>
        <sec id="sec-3-2-7">
          <title>Finally, we consider the last case.</title>
          <p>Lemma 4. Let MaxAmbig( ) be unstable. If the Union and the Federation are also unstable, then the
group that wins the most from secession is either the right pole, or the left pole united with the part of the
right pole not in the ambiguous coalition.</p>
          <p>Proof. It is clear that an ambiguous coalition cannot be a credible threat. Indeed, it cannot be larger
than MaxAmbig, and the facility becomes further from one half of the agents. The Union cannot be
credible if it is unstable, analogously to lemma 2. If a credible threat has the facility on the right, then
it must contain agents from both the ambiguous coalition and the remaining right coalition. Thus,
the whole right pole must be more credible. Similarly, if it has the facility on the left, it must contain
some agents from the right. Otherwise, the Federation would be stable. Thus, the coalition containing
the left part of the ambiguous coalition and the whole right coalition must be the most credible.</p>
        </sec>
        <sec id="sec-3-2-8">
          <title>Minimization of the maximal new-to-old ratio yields the following result:</title>
          <p>Lemma 5. The maximal new-to-old ratio is minimal in a MaxAmbig( ) when  = 2 .
Proof. If the right pole is a credible threat, then the agents from the right part of the ambiguous
coalition compare 1 to 12 +  −  and the agents from the right coalition compare 1 to 1 . Similarly,
if the left pole plus the right coalition is a credible threat, then the agents from the left c−o1mpare 1 to

21 +  , and the agents from the right compare 1 +  to 1 . Note that
 −1

1
2
+  −  &lt;</p>
          <p>+  &lt;
1
2
1</p>
          <p>+
2 
1
&lt;</p>
          <p>1
 − 1
where the second inequality arises from  &lt;
1 and the last one from
 &lt;
2. Thus, in the first case the
right half of the ambiguous coalition is relatively less satisfied than the right coalition. To determine
the instability, we should now compare three ratios: 1
 / ( 21 +  −  ), 1 / ( 21 +  )
and
( 1 +  ) /  −11 . It is
fr/o(m21 (+1 2+) &gt;)( ( −1 +1) &lt;) 1/,−1w1 .hIinchdefeodll,oiwtissferqoumiv a&lt;lent to 2 &gt; (1 +  )(1 +  )( − 1). Since  &lt;
1</p>
          <p>1 and  &lt;  + 1.
clear that the maximum of the first two values is minimal when  = 2 . Then it can be shown that
1, it follows</p>
        </sec>
        <sec id="sec-3-2-9">
          <title>Now we compare the new-to-old ratios of all three structures and prove the following result:</title>
          <p>Theorem 1. The maximal new-to-old ratio is minimal among Union, Pseudofederation( ) and
MaxAmbig( ) for  = √685−3 ≈ 0.6328 and  = 1+√213/5 ≈ 1.3062. The relative instability is  = √65 − 8 ≈ 0.06226
and the parameter of Pseudofederation is  =  1(1−+ ) ≈ 0.0813.</p>
          <p>Proof sketch. We should minimize the maximum of  (,  ) = 1/ ( 1+1 +  ),  (,  ) = 1 −  21(−1+ ) and
 . It can be shown that  is decreasing by both variables,  is increasing by both
 (,  ) = 1 / ( 21 + 2 )
and  is decreasing by  and increasing by  . Thus, if the maximum is reached by only one function,
then it can be decreased by changing some variable. If it is reached by  and  simultaneously, then
it can be decreased by rising  . If it is reached by  and  , then it can be decreased by lowering  .
And if it is reached by  and  , then it equals 2( +1) and thus can be decreased by lowering  . Thus,
the maximum is minimal only if all three maxima3 n+d1s are equal. Solving the equations, one can obtain
the claimed values.</p>
        </sec>
      </sec>
      <sec id="sec-3-3">
        <title>3.3. Analysis of the remaining structures</title>
        <sec id="sec-3-3-1">
          <title>Now we show that in any setting the least unstable configuration is either the Union, or a Pseudofederation, or a MaxAmbig. We start from the following theorem proven in [16].</title>
          <p>Theorem 2. In any bipolar world, the most unstable configuration consists of at most three jurisdictions,
of which:
• At most one locates the facility at 0, at most one locates it at  and at most one locates it somewhere
else;
• Among coalitions with the facilities at 0 and  at most one contains agents from the other pole.</p>
        </sec>
        <sec id="sec-3-3-2">
          <title>Now we should exclude all possibilities except the three considered types. The idea is to prove that</title>
          <p>in any other configuration some coalition wishes to break out with willingness greater than √65 − 8.</p>
        </sec>
        <sec id="sec-3-3-3">
          <title>The whole proof is rather technical and tedious, so we present only the general idea.</title>
          <p>Theorem 3. In any bipolar world, the most unstable configuration is either the Union, or a
Pseudofederation( ) for  ∈ [0,  − 1], or a MaxAmbig( ).</p>
        </sec>
        <sec id="sec-3-3-4">
          <title>Proof idea. Theorem 2 leaves the following possible configurations: two coalitions where one is am</title>
          <p>biguous but not maximal; a Pseudofederation( ) with  ∉ [0,  −1], or a configuration with 3 coalitions.</p>
        </sec>
        <sec id="sec-3-3-5">
          <title>The following facts may be demonstrated and imply the statement:</title>
          <p>• If one coalition is ambiguous but not maximal, then some threat is more credible than the most
credible one in the MaxAmbig with the same median. Thus, MaxAmbig is more stable.
• The relative instability of Pseudofederation( ) increases when  &gt;  − 1. If  ∈ [0, 1], then
the relative instability of Pseudofederation(− ) is higher than the one of Pseudofederation( ).</p>
          <p>Thus, the minimal instability of a Pseudofederation is reached for  ∈ [0,  − 1].
• In the case of three coalitions several subcases are considered. If the ambiguous coalition is
rather small, it will be much better of when joining some other coalition. If it is large, then it
can be shown that MaxAmbig is more stable. For intermediate sizes it can be directly shown
that the instability is larger than √65 − 8.
4. Approximate migrational stability under egalitarian
redistribution</p>
        </sec>
        <sec id="sec-3-3-6">
          <title>Here we consider the model described by Weber et al [8]. All costs inside a jurisdiction are redistributed equally among all its members. The authors show that there exists a world without a stable configuration. We analyze their construction and tune the parameters in order to obtain the maximal possible instability. We believe that this value is close to maximum.</title>
          <p>The example is the following: there are 6 agents living at 3 points. Agents 1 lives at point 0, agents
2 and 3 live at point  and agents 4, 5 and 6 live at point  +  . In [8] the parameters are the following:
 = 1.9,  = 2.2. The idea behind the result is the following. The grand coalition is not stable because
agent 1 wishes to secede and not to subsidize the others’ transportation. Then agent 2 would also like
to secede for the same reason (the configuration is ({1}, {2}, {3, 4, 5, 6})). Then agent 3 would like to
join agent 2: ({1}, {2, 3}, {4, 5, 6}). Then agent 1 would also like to join: ({1, 2, 3}, {4, 5, 6}) (Note that
agents 2 and 3 may become worse of, but in the migrational setting it does not matter.) But now
agent 3 would like not to subsidize agent 1’s transportation and would better join the right coalition:
({1, 2}, {3, 4, 5, 6}). Now agent 1 would like to be alone, and we return to ({1}, {2}, {3, 4, 5, 6}).</p>
        </sec>
        <sec id="sec-3-3-7">
          <title>Now we calculate the values compared by the switching agents. Every row of the following table</title>
          <p>presents the initial configuration, the final configuration, the agent who wishes to move, the values
she compare (the initial cost reduced by  and the final cost) and the resulted bound on  .</p>
          <p>Old config. New config. Agent Ineq. on util. Ineq. on 
{1, 2, 3, 4, 5, 6} {1}, {2, 3, 4, 5, 6} 1
{1}, {2, 3, 4, 5, 6} {1}, {2}, {3, 4, 5, 6} 2
{1}, {2}, {3, 4, 5, 6} {1}, {2, 3}, {4, 5, 6} 3  +411 −(1 −&gt;  ) +&gt;1 21
{1}, {2, 3}, {4, 5, 6} {1, 2, 3}, {4, 5, 6} 1 3</p>
          <p>{1, 2, 3}, {4, 5, 6} {1, 2}, {3, 4, 5, 6} 3  +31 (1 −  ) &gt; 1+4
The analysis of the inequalities lead to the following re s+2u1l(t1: −  ) &gt; 1
{1, 2}, {3, 4, 5, 6} {1}, {2}, {3, 4, 5, 6} 1
 +36 +1 (1 −  ) &gt; 1
2 5+1 (1 −  ) &gt; 1
 &lt;  ++33 +−15
 &lt; 22 −+41
 &lt;  −+11
 &lt; 2−3
 &lt; 4 4+1+−43
 &lt;  −+11
Theorem 4. In every world of the described type, the relative instability is at most  ≈ 0.0963 (the exact
value is the real root of the equation 8 3 − 24 2 + 23 − 2 = 0). The corresponding values of the distances
are  = 2 − 3 ≈ 1.711 and  = 24−+2  ≈ 2.2665. Every value of instability below this threshold is achievable.
Proof idea. We should find the maximal  for which all inequalities are satisfiable. It may be shown
that the binding inequalities are  &lt; 22 −+41 ,  &lt; 2− and  &lt; 4 +1−3 . Solving the system of corresponding
equalities yields the claimed values. 3 4 +4
5. Approximate migrational stability under the central median rule</p>
        </sec>
        <sec id="sec-3-3-8">
          <title>Here we analyze a model described by Bogomolnaia et al [10]. Namely, we analyze migrational sta</title>
          <p>bility under no-redistribution and central median rules. Recall that the latter means that if a group
has an even number of members, then the facility is located at the middle of the segment of medians.</p>
          <p>The considered example is the following: agent 1 lives at point 0, agents 2 and 3 live at point  , agent
4 lives at point  + and agent 5 lives at point  + + . In [10] the values are  = 3203 ,  = 51 and  = 85 . The
idea behind the instability result is the following: agents 2, 3 and 4 are always in the same coalition.
But agent 5 prefers to be in the main coalition if agent 1 does not belong to it, and agent 1 prefers to
be in the main coalition if agent 5 belongs to it. Thus we have the following cycle of configurations:</p>
        </sec>
        <sec id="sec-3-3-9">
          <title>We analyze the following table:</title>
          <p>({1}, {2, 3, 4}, {5}) → ({1}, {2, 3, 4, 5}) → ({1, 2, 3, 4, 5}) → ({1, 2, 3, 4}, {5}) → ({1}, {2, 3, 4}, {5}).</p>
        </sec>
        <sec id="sec-3-3-10">
          <title>Old config.</title>
          <p>{1}, {2, 3, 4}, {5}
{1}, {2, 3, 4, 5}
{1, 2, 3, 4, 5}
{1, 2, 3, 4}, {5}</p>
        </sec>
        <sec id="sec-3-3-11">
          <title>New config.</title>
          <p>{1}, {2, 3, 4, 5}
{1, 2, 3, 4, 5}
{1, 2, 3, 4}, {5}
{1}, {2, 3, 4}, {5}</p>
        </sec>
        <sec id="sec-3-3-12">
          <title>Agent</title>
          <p>5
1
5
1</p>
        </sec>
        <sec id="sec-3-3-13">
          <title>The analysis of the inequalitites shows the following: Ineq. on util.</title>
        </sec>
      </sec>
    </sec>
    <sec id="sec-4">
      <title>6. Conclusion</title>
      <p>= 14 and  = 8407 would fit. Every value of instability below this threshold is achievable.
Theorem 5. In every world of the described type, the relative instability is at most  = 41−√1601 ≈ 0.0247.
40
√
The corresponding values of the distances are  =
1601−9 ≈ 0.775 and a range of  and  : for instance,
40
Proof idea. It turns out that only the conditions on  are binding. For the claimed value of  the
values are equal. It can be checked that for the specified values of  and  both other inequalities are
problem hard for some computational complexity class?</p>
      <sec id="sec-4-1">
        <title>This work provides an analysis of approximate stability of jurisdiction partitions in several frame</title>
        <p>works. We believe that the considered examples are either the most unstable worlds or close to them.</p>
      </sec>
      <sec id="sec-4-2">
        <title>The future research should clarify this issue and give the provable least unstable constructions. An</title>
        <p>other possible approach is the algorithmic one. Suppose that an algorithm gets the total description
of a world and a number  . Can we eficiently compute whether this world is  -stable? Or is this</p>
      </sec>
      <sec id="sec-4-3">
        <title>What can we learn about the real world from our constructions? It depends on two things. Firstly,</title>
        <p>how typical are our examples? It seems that a bipolar world may occur in diferent situations, like
twin cities or cat and dog lovers. And the situation that one pole is about 30% larger than the other
is also realistic. For instance, it is how much Minneapolis is greater by population than Saint Paul.
Secondly, what are the real values of  ? It seems that in long-existing structures it can be much larger
than several percents, so the participants may want to make a new coalition but then see the cost and
“all of the sudden we’re scared to change a thing”. A study of such real cases would be an interesting
research topic.</p>
      </sec>
    </sec>
    <sec id="sec-5">
      <title>Acknowledgments</title>
      <sec id="sec-5-1">
        <title>The work is supported with RFBR 19-01-00563 grant.</title>
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[3] F. Westhof, Existence of equilibria in economies with a local public good, Journal of Economic
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[5] J. Greenberg, S. Weber, Strong Tiebout equilibrium under restricted preferences domain, Journal
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