Tiebout Economies with Differential Genetic Types and Endogenously Chosen Crowding Characteristics

We consider a Tiebout economy with di®erential crowding and public projects in which agents are distinguished by their tastes and genetic endowments. Agents choose which crowding characteristic, for example, skill, they wish to express, and this a®ects their value to other members of their jurisdiction, club, ̄rm, etc. An agent's choice is in°uenced both by his genetic endowment, which a®ects his cost of acquiring crowding characteristics, and his preferences over which crowding characteristic he expresses. We show that if small groups are strictly e®ective, the core is equivalent to the set of anonymous competitive equilibrium outcomes, but that the core generally contains taste-homogeneous jurisdictions. Journal of Economic Literature Classi ̄cation Numbers: H41, H72. Running head: Endogenous crowding types