On cooperation in open communities

Özgür Gürerk, Bernd Irlenbusch and Bettina Rockenbach

Journal of Public Economics, 2014, vol. 120, issue C, 220-230

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.

Keywords: Open communities; Endogenous grouping; Voting with feet; Cooperation; Social dilemmas; Punishment (search for similar items in EconPapers)
JEL-codes: C72 C92 H41 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (35)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:120:y:2014:i:c:p:220-230

DOI: 10.1016/j.jpubeco.2014.10.001

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