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Published August 2014 | Supplemental Material + Published
Journal Article Open

Local institutions and the dynamics of community sorting

Abstract

This paper studies the dynamics by which populations with heterogeneous preferences for public good provision sort themselves into communities. I conduct laboratory experiments to consider which institutions best facilitate efficient self-organization when residents can move freely between locations. I find that institutions requiring all residents of a community to pay equal taxes enable subjects to sort into stable, homogeneous communities. Though sorted, residents often fail to attain the provision level best suited for them. When residents can vote for local tax policies with ballots, along with their feet, each community converges to the most efficient outcome for its population.

Additional Information

© 2014 American Economic Association. I thank Charles Plott, Leeat Yariv, Rod Kiewiet, John Ledyard, Jean-Laurent Rosenthal, and the Harvard Decision Science Laboratory. Go to http://dx.doi.org/10.1257/mic.6.3.136 to visit the article page for additional materials and author disclosure statement(s) or to comment in the online discussion forum. Formerly SSWP 1338.

Attached Files

Published - sswp1338_-_published.pdf

Supplemental Material - 2012-0156_app.pdf

Supplemental Material - 2012-0156_data.zip

Supplemental Material - 2012-0156_ds.zip

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Additional details

Created:
August 20, 2023
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October 17, 2023