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Networks, Law, and the Paradox of Cooperation

Listed author(s):
  • Bryan Caplan

    ()

  • Edward Stringham

    ()

There is a tension between libertarians' optimism about private supply of public goods and skepticism of the viability of voluntary collusion (Cowen 1992, Cowen and Sutter 1999). Playing off this asymmetry, Cowen (1992) advances the novel argument that the “free market in defense services” favored by anarcho-capitalists is a network industry where collusion is especially feasible. The current article dissolves Cowen's asymmetry, showing that he fails to distinguish between self-enforcing and non-self-enforcing interaction. Case study evidence on network behavior before and after antitrust supports our analysis. Furthermore, libertarians' joint beliefs on public goods and collusion are, contrary to Cowen and Sutter (1999), theoretically defensible. Copyright Kluwer Academic Publishers 2003

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Article provided by Springer & Society for the Development of Austrian Economics in its journal The Review of Austrian Economics.

Volume (Year): 16 (2003)
Issue (Month): 4 (December)
Pages: 309-326

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Handle: RePEc:kap:revaec:v:16:y:2003:i:4:p:309-326
DOI: 10.1023/A:1027393021392
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