A sequential game of endowment effect and natural property rights

- It is a sequential game that links endowment effect with natural property rights.
- Natural property rights is jointly decided by endowment effect and relative contestability.
- Abundant idle resources helps to secure natural property rights.
- Third-party help is needed when the intruder significantly dominates in contestability.

This study develops a sequential game between the incumbent and the intruder to examine how endowment effect decides natural property rights of a territory without third-party intervention.