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Strangers’ property

Author

Listed:
  • Marco Fabbri
  • Giuseppe Dari-Mattiacci
  • Matteo Rizzolli

Abstract

Why are impartial institutions such as formalized property rights so important for the emergence of impersonal trade? Previous literature has stressed the role of such institutions in providing third-party enforcement to shield strangers from locals’ opportunism. We document the existence of a second mechanism based on the role of formalized property rights in inducing respect for the property of strangers, regardless of enforcement. Ten years after the randomized introduction of formal property rights across rural Benin, we conducted a taking-dictator-game experiment in which participants could appropriate the endowment of an anonymous stranger from a different village. Even if enforcement institutions are absent and peer effects are silenced by design, participants from villages where the reform was implemented took significantly less than those in control villages. We further give consideration to several possible transmission channels and discuss their plausibility (JEL: D02, D91, K11, K42).

Suggested Citation

  • Marco Fabbri & Giuseppe Dari-Mattiacci & Matteo Rizzolli, 2025. "Strangers’ property," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 41(2), pages 527-569.
    • Handle: RePEc:oup:jleorg:v:41:y:2025:i:2:p:527-569.
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    File URL: http://hdl.handle.net/10.1093/jleo/ewae007
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    More about this item

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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