On Cooperation in Open Communities
26 Pages Posted: 26 Nov 2013
Date Written: November 08, 2013
Economic interactions often take place in open communities, in which agents are free to leave a community to join a more preferred one. Tiebout (1956) conjectured that “voting with feet” might generate considerable efficiency gains since individuals with different preferences sort themselves into different 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.
Keywords: Open communities, endogenous choice, voting with feet, cooperation, social dilemmas
JEL Classification: C72, C92, H41
Suggested Citation: Suggested Citation