103. The ease with which individuals may move between communities (or inhabit multiple communities simultaneous through a fractionation of their own individual identities) also implies that Cyberspace may provide conditions necessary and sufficient for something more closely resembling the optimal collective production of a particular set of goods -- namely, "laws" -- than can be achieved in the real world. Cyberspace may closely approximate the idealized model for the allocation of local goods and services set forth by Charles Tiebout, see Charles Tiebout, A Pure Theory of Local Expenditures, 64 J. POL. ECON. 416 (1956), in which optimal allocation of locally-produced public goods is provided by small jurisdictions competing for mobile residents. The Tiebout model of intergovernmental competition has four components: (1) a perfectly elastic supply of jurisdictions, (2) costless mobility of individuals among jurisdictions, (3) full information about the attributes of all jurisdictions, and (4) no interjurisdictional externalities. See Robert P. Inman and Daniel L. Rubinfeld, The Political Economy of Federalism, Working Paper No. 94-15, Boalt Hall Program in Law and Economics (1994), at 11-16, (reprinted in D. Mueller (ed.), Developments in Public Choice, Cambridge Univ. Press 1995). (As Inman and Rubinfeld demonstrate, a fifth assumption of the Tiebout model--the provision of public goods with a "congestible technology" such that the per capita cost of providing each level of a public good first decreases and then increases as more individuals move into the jurisdiction--is not necessary for the model. Id., at 13.) In a Tieboutian world,. . . each locality provides a package of local public goods consistent with the preferences of its residents (consumer-voters). Residents whose preferences remain unsatisfied by a particular locality's package of goods and services would (costlessly) move. . . . Escape from undesirable packages of goods and services is feasible as a result of two explicit characteristics of the Tiebout model: absence of externalities and mobility of residents.
Gillette, In Partial Praise of Dillon's Rule, or, Can Public Choice Theory Justify Local Government Law, 67 CHI-KENT L. REV. 959, 969 (1991). We suggest that cyberspace may be a closer approximation to ideal Tieboutian competition between rule-sets than exists in the nonvirtual world, a consequence of (1) the low cost of establishing an online "jurisdiction," see text at note 93, (2) the ease of exit from online communities, (3) the relative ease of acquiring information about the practices of online communities, and (4) the greater impermeability of the internal, software-mediated boundaries between online communities in cyberspace, see supra note 98, which may mitigate (at least to some extent) the problem of inter-community externalities.