Stone Age Equilibrium
AbstractWe introduce the notion of a stone age equilibrium to study societies in which property rights are absent, bilateral exchange is either coercive or voluntary, and relative strength governs power relations in coercive exchange. We stress the importance of free disposal of goods which allows for excess holdings larger than consumption, thereby modelling the power to withhold goods from others. Under complete, transitive, continuous and strictly-convex preferences, stone age equilibria exist. The maximum of the lexicographic welfare function in which agents are ranked by descending strength always corresponds to a stone age equilibrium. Every stone age equilibrium is weakly Pareto efficient.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 09-092/1.
Date of creation: 04 Nov 2009
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Power; Exchange Economy; Coercive Trade; Voluntary Trade; Power to Take;
Find related papers by JEL classification:
- D0 - Microeconomics - - General
- D7 - Microeconomics - - Analysis of Collective Decision-Making
- P0 - Economic Systems - - General
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Even coercion is Pareto efficient
by Economic Logician in Economic Logic on 2010-07-05 14:10:00
- Poverty & attitudes, chickens & eggs
by chris dillow in Stumbling and Mumbling on 2010-05-20 12:47:09
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