Political Institutions and Sorting in a Tiebout Model
Ken Kollman, John H. Miller, and Scott E. Page
Key Words:
Tiebout, Simulated Annealing, Political Institutions
We construct a computational model of Tiebout competition and show that political institutions differ in their ability to sort citizens effectively. In particular, we find that certain types of institutions---those that become more ``politically unstable'' as citizen heterogeneity increases---perform relatively poorly given a single jurisdiction, yet these same institutions perform relatively well when there are multiple jurisdictions. We provide an explanation for this phenomenon which draws upon simulated annealing, a discrete nonlinear search algorithm.