On cooperation in open communities

• Published in: Journal of public economics Vol. 120; pp. 220 - 230
• Main Authors: Gürerk, Özgür, Irlenbusch, Bernd, Rockenbach, Bettina
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01-12-2014
• Subjects: Community; Cooperation; Economic efficiency; Endogenous grouping; Environment; Institutions; Open communities; Punishment; Social dilemmas; Voting turnout; Voting with feet; Punishment; Endogenous grouping; H41; Cooperation; Social dilemmas; Open communities; C92; Voting with feet; C72
• ISSN: 0047-2727; 1879-2316
• DOI: 10.1016/j.jpubeco.2014.10.001

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.
•In open communities, agents may leave a community to join a more preferred one.•“Voting with feet” might generate considerable efficiency gains (Tiebout, 1956).•We experimentally show cooperation-enhancing effect of self-selection.•Voting with feet enables the right initial match between agents and communities.