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Exchange, theft, and the social formation of property

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  • Kimbrough, Erik O.
  • Smith, Vernon L.
  • Wilson, Bart J.

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.

Suggested Citation

  • Kimbrough, Erik O. & Smith, Vernon L. & Wilson, Bart J., 2010. "Exchange, theft, and the social formation of property," Journal of Economic Behavior & Organization, Elsevier, vol. 74(3), pages 206-229, June.
  • Handle: RePEc:eee:jeborg:v:74:y:2010:i:3:p:206-229
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    1. Camera, Gabriele & Gioffré, Alessandro, 2014. "Game-theoretic foundations of monetary equilibrium," Journal of Monetary Economics, Elsevier, vol. 63(C), pages 51-63.
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    3. Gwaleba, Method Julius & Chigbu, Uchendu Eugene, 2020. "Participation in property formation: Insights from land-use planning in an informal urban settlement in Tanzania," Land Use Policy, Elsevier, vol. 92(C).
    4. Bart J. Wilson & Taylor Jaworski & Karl E. Schurter & Andrew Smyth, 2012. "The Ecological and Civil Mainsprings of Property: An Experimental Economic History of Whalers' Rules of Capture," Journal of Law, Economics, and Organization, Oxford University Press, vol. 28(4), pages 617-656, October.
    5. Ahn, T.K. & Loukas, Balafoutas & Batsaikhan, Mongoljin & Campos-Ortiz, Francisco & Putterman, Louis & Sutter, Matthias, 2018. "Trust and communication in a property rights dilemma," Journal of Economic Behavior & Organization, Elsevier, vol. 149(C), pages 413-433.
    6. Joy Buchanan & Bart Wilson, 2014. "An experiment on protecting intellectual property," Experimental Economics, Springer;Economic Science Association, vol. 17(4), pages 691-716, December.
    7. Campos-Ortiz, Francisco & Putterman, Louis & Ahn, T.K. & Balafoutas, Loukas & Batsaikhan, Mongoljin & Sutter, Matthias, 2012. "Security of Property as a Public Good: Institutions, Socio-Political Environment and Experimental Behavior in Five Countries," IZA Discussion Papers 6982, Institute for the Study of Labor (IZA).
    8. Aimone, Jason A. & North, Charles & Rentschler, Lucas, 2019. "Priming the jury by asking for Donations: An empirical and experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 160(C), pages 158-167.
    9. Faillo, Marco & Rizzolli, Matteo & Tontrup, Stephan, 2019. "Thou shalt not steal: Taking aversion with legal property claims," Journal of Economic Psychology, Elsevier, vol. 71(C), pages 88-101.
    10. Andrew Young, 2015. "From Caesar to Tacitus: changes in early Germanic governance circa 50 BC-50 AD," Public Choice, Springer, vol. 164(3), pages 357-378, September.
    11. Meier, Stephan & Stephenson, Matthew, 2015. "Culture of Trust and Division of Labor," IZA Discussion Papers 8974, Institute of Labor Economics (IZA).
    12. Kimbrough, Erik O. & Wilson, Bart J., 2013. "Insiders, outsiders, and the adaptability of informal rules to ecological shocks," Ecological Economics, Elsevier, vol. 90(C), pages 29-40.
    13. Strømland, Eirik & Tjøtta, Sigve & Torsvik, Gaute, 2018. "Mutual choice of partner and communication in a repeated prisoner's dilemma," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 75(C), pages 12-23.
    14. Ahn, T.K. & Balafoutas, Loukas & Batsaikhan, Mongoljin & Campos-Ortiz, Francisco & Putterman, Louis & Sutter, Matthias, 2016. "Securing property rights: A dilemma experiment in Austria, Mexico, Mongolia, South Korea and the United States," Journal of Public Economics, Elsevier, vol. 143(C), pages 115-124.
    15. Victor Klockmann & Alicia von Schenk & Ferdinand von Siemens, 2021. "Division of Labor and the Organization of Knowledge in Production: A Laboratory Experiment," CESifo Working Paper Series 8822, CESifo.
    16. Erik O. Kimbrough & Roman M. Sheremeta, 2012. "Why Can’t We Be Friends? Entitlements, bargaining, and conflict," Working Papers 12-16, Chapman University, Economic Science Institute.
    17. Bart Wilson, 2015. "Further towards a theory of the emergence of property," Public Choice, Springer, vol. 163(1), pages 201-222, April.
    18. Neil Martin, 2016. "Strategy as Mutually Contingent Choice," SAGE Open, , vol. 6(2), pages 21582440166, May.
    19. Boyce, John R. & Bruner, David M., 2017. "Conflict resolution through voluntary provision of property protection," Journal of Economic Psychology, Elsevier, vol. 63(C), pages 199-215.

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