Political Institutions and Sorting in a Tiebout Model
The authors construct a computational model of Tiebout competition and show that political institutions differ in their ability to sort citizens effectively. In particular, they find that certain types of institutions--those that become more 'politically unstable' as citizen heterogeneity increases--perform relatively poorly given a single jurisdiction, yet these same institutions perform relatively well when there are multiple jurisdictions. The authors provide an explanation for this phenomenon which draws upon simulated annealing, a discrete nonlinear search algorithm. Copyright 1997 by American Economic Association.
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Volume (Year): 87 (1997)
Issue (Month): 5 (December)
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