Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86705
Authors: 
Houba, Harold
Weikard, Hans-Peter
Year of Publication: 
2009
Series/Report no.: 
Tinbergen Institute Discussion Paper 09-092/1
Abstract: 
We introduce the notion of a stone age equilibrium to study societies in which property rights are absent, bilateral exchange is either coercive or voluntary, and relative strength governs power relations in coercive exchange. We stress the importance of free disposal of goods which allows for excess holdings larger than consumption, thereby modelling the power to withhold goods from others. Under complete, transitive, continuous and strictly-convex preferences, stone age equilibria exist. The maximum of the lexicographic welfare function in which agents are ranked by descending strength always corresponds to a stone age equilibrium. Every stone age equilibrium is weakly Pareto efficient.
Subjects: 
Power
Exchange Economy
Coercive Trade
Voluntary Trade
Power to Take
JEL: 
D0
D7
P0
Document Type: 
Working Paper

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