caa a22 4500 605488894 CHVBK 20210128100457.0 cr unu---uuuuu 210128e20150901xx s 000 0 eng 10.1007/s10683-014-9418-8 doi (NATIONALLICENCE)springer-10.1007/s10683-014-9418-8 Robbett Andrea Department of Economics, Middlebury College, 05753, Middlebury, VT, USA aut Voting with hands and feet: the requirements for optimal group formation [Elektronische Daten] [Andrea Robbett] This paper studies the dynamics by which individuals with heterogeneous preferences partition themselves into groups. A novel experimental environment is developed to capture the tension between increasing returns to group size and attaining a group policy closest to an ideal point. Subjects can move freely between locations, with group policy either fixed by location or determined by member vote. A primary goal is to assess which of two stability concepts common to the group formation literature predicts which groups agents sort into. The same set of Nash stable partitions exist in each condition, with the efficient, strong Nash stable state requiring subjects to form heterogeneous groups and compromise on policy. I find that subjects who are only able to move between locations with fixed policies always over-segregate, rather than build efficient heterogeneous groups. When mobility is combined with the ability to vote on local policy, most subjects reach the efficient partition. This shows outcomes cannot be determined by considering the existence of stable states alone and that consideration must also be given to subtle aspects of the system dynamics. Further, it suggests that experiments may play an important role in understanding these group formation dynamics. Economic Science Association, 2014 Group formation nationallicence Heterogeneous preferences nationallicence Experimental economics nationallicence Tiebout nationallicence Experimental political science nationallicence Experimental Economics Springer US; http://www.springer-ny.com 18/3(2015-09-01), 522-541 1386-4157 18:3<522 2015 18 10683 https://doi.org/10.1007/s10683-014-9418-8 text/html Onlinezugriff via DOI BK010053 XK010053 XK010000 Metadata rights reserved Springer special CC-BY-NC licence nationallicence 1 research-article jats NATIONALLICENCE NATIONALLICENCE NL-springer NATIONALLICENCE 856 40 https://doi.org/10.1007/s10683-014-9418-8 text/html Onlinezugriff via DOI NATIONALLICENCE 100 1- Robbett Andrea Department of Economics, Middlebury College, 05753, Middlebury, VT, USA aut NATIONALLICENCE 773 0- Experimental Economics Springer US; http://www.springer-ny.com 18/3(2015-09-01), 522-541 1386-4157 18:3<522 2015 18 10683