Article ID Journal Published Year Pages File Type
884091 Journal of Economic Behavior & Organization 2010 24 Pages PDF
Abstract

We design a laboratory experiment to explore whether and how property endogenously arises in a specialization and exchange environment where “theft” is costless. Additional treatments make available optional private protection mechanisms. We find that although an absence of exogenous enforcement does not hamper property's emergence in all cases, the private options tend to worsen outcomes on average. Property emerges when subjects self-organize groups, understand potential gains from trade, convince group members that all benefit by avoiding theft, and display credible commitment to cooperation in their actions. In other words, as Hume argued in 1740, property is a convention.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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