Demand for contract enforcement in a barter environment
Do greater potential gains from trade enhance or erode contracting institutions? In an anonymous exchange environment traders can sign a contract, hence agreeing to interact with the assigned partner, or wait till the next match. Any contract can be endorsed (for a payment) by the enforcement agency, which then observes the interaction with a positive probability known to the traders and punishes any detected infractors. Demand for contract enforcement is the highest amount a proposer of a contract is ready to pay to the agency, in a stationary subgame perfect equilibrium. It may be strictly positive, as we show, even when contracts are broken. Surprisingly, larger potential gains from exchange may dampen the demand, but not always: the demand is boosted under agencies that oversee the interactions frequently. Copyright Springer-Verlag 2013
Volume (Year): 41 (2013)
Issue (Month): 1 (June)
|Contact details of provider:|| Web page: http://link.springer.de/link/service/journals/00355/index.htm |
|Order Information:||Web: http://link.springer.de/orders.htm|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Konstantin Sonin, 2002.
"Why the Rich May Favor Poor Protection of Property Rights,"
William Davidson Institute Working Papers Series
544, William Davidson Institute at the University of Michigan.
- Sonin, Konstantin, 2003. "Why the rich may favor poor protection of property rights," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 715-731, December.
- Konstantin Sonin, 2003. "Why the Rich May Favor Poor Protection of Property Rights," Working Papers w0022, Center for Economic and Financial Research (CEFIR).
- Skaperdas, Stergios, 1992.
"Cooperation, Conflict, and Power in the Absence of Property Rights,"
American Economic Review,
American Economic Association, vol. 82(4), pages 720-39, September.
- Skaperdas, S., 1991. "Cooperation, Conflict And Power In The Absence Of Property Rights," Papers 90-91-06a, California Irvine - School of Social Sciences.
- Avinash Dixit, 2003. "Trade Expansion and Contract Enforcement," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1293-1317, December.
- Michele Piccione & Ariel Rubinstein, 2007. "Equilibrium in the Jungle," Economic Journal, Royal Economic Society, vol. 117(522), pages 883-896, 07.
- Stigler, George J, 1992. "Law or Economics?," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 455-68, October.
- Moselle, Boaz & Polak, Benjamin, 2001. "A Model of a Predatory State," Journal of Law, Economics and Organization, Oxford University Press, vol. 17(1), pages 1-33, April.
- Bos, Dieter & Kolmar, Martin, 2003.
"Anarchy, efficiency, and redistribution,"
Journal of Public Economics,
Elsevier, vol. 87(11), pages 2431-2457, October.
- Avinash Dixit, 2003.
"On Modes of Economic Governance,"
Econometric Society, vol. 71(2), pages 449-481, March.
- Al-Najjar, Nabil I., 2008. "Large games and the law of large numbers," Games and Economic Behavior, Elsevier, vol. 64(1), pages 1-34, September.
- Herschel Grossman, 2000.
"The Creation of Effective Property Rights,"
2000-15, Brown University, Department of Economics.
- Dhillon, Amrita & Rigolini, Jamele, 2006.
"Development and the Interaction of Enforcement Institutions,"
The Warwick Economics Research Paper Series (TWERPS)
748, University of Warwick, Department of Economics.
- Dhillon, Amrita & Rigolini, Jamele, 2011. "Development and the interaction of enforcement institutions," Journal of Public Economics, Elsevier, vol. 95(1), pages 79-87.
- Dhillon, Amrita & Rigolini, Jamele, 2011. "Development and the interaction of enforcement institutions," Journal of Public Economics, Elsevier, vol. 95(1-2), pages 79-87, February.
- Dhillon, Amrita & Rigolini, Jamele, 2006. "Development and the interaction of enforcement institutions," Policy Research Working Paper Series 4090, The World Bank.
- Chris Bidner & Patrick Francois, 2011.
"Cultivating Trust: Norms, Institutions and the Implications of Scale,"
Royal Economic Society, vol. 121(555), pages 1097-1129, 09.
- Bidner, Chris & Francois, Patrick, 2009. "Cultivating Trust: Norms, Institutions and the Implications of Scale," Economics working papers patrick_francois-2009-66, Vancouver School of Economics, revised 02 Dec 2009.
- Grossman, Herschel I & Kim, Minseong, 1996.
" Predation and Accumulation,"
Journal of Economic Growth,
Springer, vol. 1(3), pages 333-50, September.
- DE MICHELIS, Stefano & GERMANO, Fabrizio, 2000.
"On the indices of zeros of nash fields,"
CORE Discussion Papers
2000017, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Leonid Polishchuk & Alexei Savvateev, 2004. "Spontaneous (non)emergence of property rights," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(1), pages 103-127, 03.
- North, Douglass C., 1984. "Government and the Cost of Exchange in History," The Journal of Economic History, Cambridge University Press, vol. 44(02), pages 255-264, June.
- Daron Acemoglu & Simon Johnson, 2005.
Journal of Political Economy,
University of Chicago Press, vol. 113(5), pages 949-995, October.
- Umbeck, John, 1981. "Might Makes Rights: A Theory of the Formation and Initial Distribution of Property Rights," Economic Inquiry, Western Economic Association International, vol. 19(1), pages 38-59, January.
- Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472 Elsevier.
- Marcel Fafchamps & Bart Minten, 1999.
"Property rights in a flea market economy,"
Economics Series Working Papers
WPS/1999-25, University of Oxford, Department of Economics.
- Marcel Fafchamps & Bart Minten, 1999. "Property rights in a flea market economy," CSAE Working Paper Series 1999-25, Centre for the Study of African Economies, University of Oxford.
- Fafchamps, Marcel & Minten, Bart, 1999. "Property rights in a flea market economy," MTID discussion papers 27, International Food Policy Research Institute (IFPRI).
- Gonzalez, Francisco M., 2007. "Effective property rights, conflict and growth," Journal of Economic Theory, Elsevier, vol. 137(1), pages 127-139, November.
- Kiyotaki, Nobuhiro & Wright, Randall, 1993. "A Search-Theoretic Approach to Monetary Economics," American Economic Review, American Economic Association, vol. 83(1), pages 63-77, March.
- Magnus Hoffmann, 2010. "Enforcement of property rights in a barter economy," Social Choice and Welfare, Springer, vol. 34(2), pages 249-263, February.
When requesting a correction, please mention this item's handle: RePEc:spr:sochwe:v:41:y:2013:i:1:p:73-97. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn)or (Christopher F Baum)
If references are entirely missing, you can add them using this form.