Property Out of Conflict: A Survey and Some New Results

Property rights often emerge from adversarial interactions in which agents make claims and defend them from the appropriation efforts of others. In this paper, we first offer a survey of the theoretical literature on this issue. We systematize the existing models by classifying them into two families and show that they can explain the emergence of classic types of property rights. We then explore a new model where agents can become the sole owner of a commonly owned production resource through an exclusion contest. We show that if overexploitation under joint property is severe enough relative to the returns to scale of conflict activities, private property emerges out of conflict. Inequality makes private ownership more likely to emerge. Finally, we characterize the set of common ownership regimes which are Pareto efficient and immune to conflict. Results show that proportionality to labour inputs in output sharing makes common ownership more resilient to conflict when inequality is higher. JEL codes: D23, D62, D74, O13