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Taste-homogeneity of Optimal Jurisdictions in a Tiebout Economy with Crowding Types

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  • John P. Conley
  • Myrna Holtz Wooders

Abstract

We consider a new model of a local public goods economy with differentiated crowding in which we make a distinction between the tastes and crowding characteristics of agents. It is possible in this model to have taste-homogeneous jurisdictions that take advantage of the full array of positive crowding effects (labor complementarities, for example.) We nevertheless find that taste-heterogeneous jurisdictions are sometimes strictly superior to taste-homogeneous jurisdictions with the same crowding profile. We also provide an example which illustrates the difficulties in extending the intuitive results from the hedonic pricing literature to Tiebout economies with differentiated crowding.

Suggested Citation

  • John P. Conley & Myrna Holtz Wooders, 1998. "Taste-homogeneity of Optimal Jurisdictions in a Tiebout Economy with Crowding Types," Working Papers mwooders-98-01, University of Toronto, Department of Economics.
    • Handle: RePEc:tor:tecipa:mwooders-98-01
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    References listed on IDEAS

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    1. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    2. Brueckner Jan K., 1994. "Tastes, Skills, and Local Public Goods," Journal of Urban Economics, Elsevier, vol. 35(2), pages 201-220, March.
    3. Cole, Harold L. & Prescott, Edward C., 1997. "Valuation Equilibrium with Clubs," Journal of Economic Theory, Elsevier, vol. 74(1), pages 19-39, May.
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    6. Boadway, Robin, 1980. "A note on the market provision of club goods," Journal of Public Economics, Elsevier, vol. 13(1), pages 131-137, February.
    7. Conley, John P. & Wooders, Myrna H., 1997. "Equivalence of the Core and Competitive Equilibrium in a Tiebout Economy with Crowding Types," Journal of Urban Economics, Elsevier, vol. 41(3), pages 421-440, May.
    8. Wooders, Myrna Holtz & Zame, William R., 1987. "Large games: Fair and stable outcomes," Journal of Economic Theory, Elsevier, vol. 42(1), pages 59-93, June.
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    10. Berglas, Eitan & Pines, David, 1980. "Clubs as a case of competitive industry with goods of variable quality," Economics Letters, Elsevier, vol. 5(4), pages 363-366.
    11. Berglas, Eitan, 1976. "Distribution of tastes and skills and the provision of local public goods," Journal of Public Economics, Elsevier, vol. 6(4), pages 409-423, November.
    12. Scotchmer, Suzanne & Wooders, Myrna Holtz, 1987. "Competitive equilibrium and the core in club economies with anonymous crowding," Journal of Public Economics, Elsevier, vol. 34(2), pages 159-173, November.
    13. Barham, V. & Wooders, M.H., 1994. "First and Second Welfare Theorems for Economies with Collective Goods," Working Papers 9415e, University of Ottawa, Department of Economics.
    14. Wooders, Myrna, 1978. "Equilibria, the core, and jurisdiction structures in economies with a local public good," Journal of Economic Theory, Elsevier, vol. 18(2), pages 328-348, August.
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    Cited by:

    1. Cartwright, Edward & Conley, John & Wooders, Myrna, 2005. "The Law of Demand in Tiebout Economies," The Warwick Economics Research Paper Series (TWERPS) 734, University of Warwick, Department of Economics.
    2. Alberto Alesina & Eliana La Ferrara, 2000. "Participation in Heterogeneous Communities," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 847-904.
    3. Wooders, Myrna H., 2001. "Some corrections to claims about the literature in Engl and Scotchmer (1996)," Journal of Mathematical Economics, Elsevier, vol. 36(4), pages 295-309, December.
    4. Wooders, Myrna, 2008. "Market games and clubs," MPRA Paper 33968, University Library of Munich, Germany, revised Dec 2010.

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    More about this item

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • H40 - Public Economics - - Publicly Provided Goods - - - General

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