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This material has been published in Journal of Urban Economics 41 421-440 (1997), the only definitive repository of the content that has been certified and accepted after peer review. Copyright and all rights therein are retained by Academic Press. This material may not be copied or reposted without explicit permission. (Copyright (C) 1979 by Academic Press, Inc.).

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Equivalence of the Core and Competitive Equilibrium in a Tiebout Economy with Crowding Types
John P. Conley, Myrna H. Wooders

We propose a new model of a local public goods economy with differentiated crowding. The new feature is that taste and crowding characteristics of agents are distinguished from one another. We prove that if the economy satisfies strict small group effectiveness then the core is equivalent to the set of Tiebout equilibrium outcomes. Equilibrium prices are defined to depend solely on crowding characteristics. This implies that only publicly observable information, and not private information such as preferences, is needed to induce agents to sort themselves into efficient jurisdictions. Thus, our model allows us to satisfy Bewley's (T. Bewley, Econometrica, 49, 713-740, 1981) anonymity requirement on taxes in his well-known criticism of the Tiebout hypothesis.

Journal of Urban Economics, v 41, n 3, May 1997, p421-440 (ID UE962008)
Copyright (C) 1997 Academic Press

Full article (PDF 223K)
"Equivalence of the Core and Competitive Equilibrium in a Tiebout Economy with Crowding Types," (with J. Conley) Journal of Urban Economics 41 (1997) 421-440.