Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5034376 | Journal of Economic Behavior & Organization | 2017 | 33 Pages |
Abstract
We study theoretically and in a lab-experiment investment decisions in environments where property rights are absent. In our setting a player chooses an investment level before interacting repeatedly with a given set of agents. The investment stochastically affects the payoffs of the game in every subsequent period. We show that more volatile returns make investment more difficult in the absence of legal protection, and might force the investor to invest more to guarantee cooperation. Experimental results are broadly consistent with the theoretical findings.
Related Topics
Social Sciences and Humanities
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Economics and Econometrics
Authors
Jean-Pierre Benoît, Roberto Galbiati, Emeric Henry,