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On cooperation in open communities

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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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    Cited by:

    1. Ernst Fehr & Tony Williams, 2017. "Creating an efficient culture of cooperation," ECON - Working Papers 267, Department of Economics - University of Zurich.
    2. Gürerk, Özgür & Irlenbusch, Bernd & Rockenbach, Bettina, 2017. "Endogenously Emerging Gender Diversity in an Experimental Team Work Setting," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168067, Verein für Socialpolitik / German Economic Association.
    3. Bettina Rockenbach & Irenaeus Wolff, 2016. "Designing Institutions for Social Dilemmas," German Economic Review, Verein für Socialpolitik, vol. 17(3), pages 316-336, August.
    4. Grund, Christian & Harbring, Christine & Thommes, Kirsten, 2016. "Group (Re-)formation in Public Good Games: The Tale of the Bad Apple," IZA Discussion Papers 9982, Institute for the Study of Labor (IZA).
    5. repec:eee:jeborg:v:141:y:2017:i:c:p:177-187 is not listed on IDEAS
    6. Fehr, Ernst & Williams, Tony, 2017. "Creating an Efficient Culture of Cooperation," IZA Discussion Papers 11131, Institute for the Study of Labor (IZA).
    7. Thunström, Linda & Cherry, Todd L. & McEvoy, David M. & Shogren, Jason F., 2016. "Endogenous context in a dictator game," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 65(C), pages 117-120.

    More about this item

    Keywords

    Open communities; Endogenous grouping; Voting with feet; Cooperation; Social dilemmas; Punishment;

    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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