On Cooperation in Open Communities

26 Pages Posted: 26 Nov 2013

See all articles by Özgür Gürerk

Özgür Gürerk

University of Erfurt - Economics, Law, and Social Sciences

Bernd Irlenbusch

University of Cologne

Bettina Rockenbach

University of Cologne

Date Written: November 08, 2013

Abstract

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

Gürerk, Özgür and Irlenbusch, Bernd and Rockenbach, Bettina, On Cooperation in Open Communities (November 08, 2013). Available at SSRN: https://ssrn.com/abstract=2359751 or http://dx.doi.org/10.2139/ssrn.2359751

Özgür Gürerk (Contact Author)

University of Erfurt - Economics, Law, and Social Sciences ( email )

Nordhaeuser Str. 63
D - 99089 Erfurt
Germany

Bernd Irlenbusch

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

Bettina Rockenbach

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany
++49 470 8664 (Phone)
++49 470 8668 (Fax)

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