The emergence of zoning policy games in exurban jurisdictions: Informing collective action theory

Theoretical urban policy literature predicts the likelihood of free riding in the management of common goods such as forested open space; such outcome is often characterized as a Prisoner's Dilemma game. Numerous cases exist in which neighboring jurisdictions cooperate to maintain public goods, challenging the expected results, yet theoretical explanations of these cases have not been fully developed. In this paper, we use an agent-based model to explore how underlying micro-behaviors affect the payoffs obtained by two neighboring municipalities in a hypothetical exurban area. Payoffs are measured in terms of regional forested space and of local tax revenue at the end of the agent-based simulations; the municipalities affect these payoffs through their choice of residential zoning policies and the spillover effect between the neighboring jurisdictions. Zoning restrictions influence the conversion of farmland into residential subdivisions of different types, and consequently the location of heterogeneous residential households in the region. Developers and residents respond to the changing landscape characteristics, thus establishing a feedback between early and future land-use patterns. The structure of the simulated payoffs is analyzed using standard game theory. Our analysis shows that a variety of games, in addition to Prisoner's Dilemma, can emerge between the neighboring jurisdictions. Other games encourage coordination or subsidization, offering some explanations for the unexpected observations. The game realized in any given context depends on the initial characteristics of the landscape, the value given to the objectives each township seeks to maximize, and the income distribution of the population.