An Anti Folk Theorem? Existence and Evolution of Property Rights as a Unique Equilibrium

• Autores: Ricardo Nieva
• Localización: Abstracts of the Fifth Spanish Meeting on Game Theory and Applications / coord. por Jesús Mario Bilbao Arrese , Francisco Ramón Fernández García , 2002, ISBN 84-472-0733-1, pág. 129
• Idioma: inglés
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• Resumen

  • The institution of property rights is important for efficiency in market economies.

    Douglas North and most economists claim that lack of institutions might be behind underdevelopment. Hence instead of taking private property rights as exogenous it is necessary to have first a foundational analysis of this institution.

    In previous literature private property rights can be one of multilple equilibria outcomes of infinitely repeated games with conflict (battle of the sexes like game). In our set up we add to this class of games enforcement technological shocks.

    After generating naturally a new payoff matrix we use the Folk theorem to conclude that for this �patological� case there is a unique subgame perfect equilibrium outcome of subgames that are reached contingent on this shocks.

    Loosely speaking the player who gets the technology of enforcement shock will play the strategy game form �property right� in equilibrium. If shocks happen 2 times we get the possibility of players mantaining or changing property right regimes in equilibrium. We will identify the latter contingence with institutional change.