COST CHARACTERISTCS AND MANAGEMENT DECISTION OF OKLAHOMA COOPERATIV E GRAIN ELEVATORS When parental concern for peer group is introduced, the perfectly sorted equilibrium is no longer unique. It is now possible for ineffective districts to retain wealthy peer groups in equilibrium, as long as they are not so ineffective that families would prefer a lower- x , higher-μ district. One imperfectly sorted equilibrium is displayed in Panel D. Note that district desirability is monotonically increasing in district average income, as Theorem 2 requires that the desirability and income rankings be identical in equilibrium
