Multi-Agent Simulation of Tiebout Model
| Authors | |
|---|---|
| Year of publication | 2011 |
| Type | Article in Proceedings |
| Conference | Proceedings of the 29th International Conference Mathematical Methods in Economicst 2011 |
| MU Faculty or unit | |
| Citation | |
| Web | http://www.econ.muni.cz/~qasar/papers/KvasnickaMME2011.pdf |
| Field | Economy |
| Keywords | fiscal federalism; Tiebout’s model; agent-based simulation |
| Description | In this paper, the Tiebout model (JPE, 1956) is explored by means of an agent-based computational simulation. The simulation suggests that the Tiebout’s conjectures holds true only when the consumers are homogeneous in all respects other than their taste for public goods. If they are heterogeneous in other aspects (like productivity) too, some consumers try to parasitize on others and the others try to escape from the parasites. A system with small relocation cost does not reach an equilibrium. If the relocation cost is high enough, the system finds an equilibrium, but the equilibrium does not separate the consumers according to their taste for public goods. The aggregate quantity of public goods is lower than the optimal one and public goods and the tax burden are distributed among the inhabitants in an inefficient way. The system is preferred by a majority sufficient to establish it only under a rather restricting conditions. |