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The Powerful, the Powerless, and the Grabbing: Non-Nash Land Grabbing in the Lab

Author

Listed:
  • Felix Albrecht

    (University of Bonn)

  • Björn Frank

    () (University of Kassel)

  • Simone Gobien

    (GIGA (German Institute of Global and Area Studies))

  • Maren Hartmann

    (Heinrich Heine University Düsseldorf)

  • Özcan Ihtiyar

    (University of Kassel)

  • Elina Khachatryan

    (University of Kassel)

  • Nataliya Kusa

    (University of Kassel)

  • Ahmed Rashad

    (Frankfurt School of Finance and Management)

  • Mohamed Ismail Sabry

    (Philipps University of Marburg)

  • Sondos Shaheen

    (Heilbronn University)

  • Thomas Stöber

    (Heinrich Heine University Düsseldorf)

Abstract

Abstract Our paper models the interaction between authorities in a country with poor rule of law and a potentially acquisitive agent (e.g., an investor interested in illegitimate land acquisition), whose actions are possibly licensed by the corrupt authorities. We explore this relationship in a two-stage experiment where the authorities have the right to expropriate the investor’s earnings, if they are not content with the share of the profit they receive as a bribe. Realizing this condition, potential investors’ initial decision is whether to become a land grabber in such an authoritarian state or not. Although the risks are obvious, we find that many agents do not act according to the Nash equilibrium of the game. Many subjects in the first stage of the game, who face a potential total loss when choosing to enter into the second stage of the game, accept the risk and try to bribe the second stage dictator. Also deviating from the Nash equilibrium, the second-stage dictators often appear to be appeasable by bribery.

Suggested Citation

  • Felix Albrecht & Björn Frank & Simone Gobien & Maren Hartmann & Özcan Ihtiyar & Elina Khachatryan & Nataliya Kusa & Ahmed Rashad & Mohamed Ismail Sabry & Sondos Shaheen & Thomas Stöber, 2016. "The Powerful, the Powerless, and the Grabbing: Non-Nash Land Grabbing in the Lab," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 33(3), pages 219-242, October.
  • Handle: RePEc:spr:homoec:v:33:y:2016:i:3:d:10.1007_s41412-016-0024-1
    DOI: 10.1007/s41412-016-0024-1
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    References listed on IDEAS

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    More about this item

    Keywords

    Land transactions; Land grabbing; Weak institutions; Appropriation; Experiments;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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