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On cooperation in open communities

Author

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  • Gürerk, Özgür
  • Irlenbusch, Bernd
  • Rockenbach, Bettina

Abstract

Economic interactions often take place in open communities, where agents are free to leave in order to join a more preferred community. Tiebout (1956) conjectured that “voting with feet” might generate considerable efficiency gains, since individuals with different preferences sort themselves into those communities that suit them most. We provide new empirical insights into Tiebout's intuition by showing that self-selection in open heterogeneous communities can significantly foster communities' success. Voting with feet improves cooperation by facilitating the right initial match between individuals and institutions and by establishing a cooperative environment that is attractive for others to join.

Suggested Citation

  • Gürerk, Özgür & Irlenbusch, Bernd & Rockenbach, Bettina, 2014. "On cooperation in open communities," Journal of Public Economics, Elsevier, vol. 120(C), pages 220-230.
    • Handle: RePEc:eee:pubeco:v:120:y:2014:i:c:p:220-230
    DOI: 10.1016/j.jpubeco.2014.10.001
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    More about this item

    Keywords

    Open communities; Endogenous grouping; Voting with feet; Cooperation; Social dilemmas; Punishment;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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