On the Origins of Property Rights: Conflict and Production in the State of Nature.

Hafer, Catherine

I analyse the emergence of property rights in a model of conflict and production in the absence of institutions of enforcement. The population of agents evolves dynamically through conflicts for possession of factor goods among pairs of randomly matched agents. Conflicts are incomplete information wars of attrition with an agent's type consisting of his or her independently drawn valuation of the prize and cost of competing for it. I prove equilibrium existence and show that in the steady state of the game, the population sorts into two stable groups (resource “haves” and “have-nots”) in accordance with a known function of their primitive types.

PROPERTY rights; ECONOMIC models; PRODUCTION (Economic theory); COMMERCIAL products; EQUILIBRIUM

Review of Economic Studies, 2006, Vol 73, Issue 1, p119

0034-6527

Academic Journal

10.1111/j.1467-937X.2006.00371.x