The Emergence of Enforcement

Luca Anderlini, Leonardo Felli and Michele Piccione
Additional contact information
Leonardo Felli: University of Cambridge
Michele Piccione: London School of Economics.

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: How do mechanisms that enforce cooperation emerge in a society where none are available and agents are endowed with raw power, that allows a more powerful agent to expropriate a less powerful one? We study a model where expropriation is costly and agents can choose whether to engage in surplus-augmenting cooperation or engage in expropriation. While in bilateral relations, if cooperation is not overwhelmingly productive and expropriation is not too costly, the latter will prevent cooperation, when there are three or more agents, powerful ones can become enforcers of cooperation for agents ranked below them. In equilibrium they will expropriate smaller amounts from multiple weaker cooperating agents who in turn will not deviate for fear of being expropriated more heavily because of their larger expropriation proceeds. Surprisingly, the details of the power structure are irrelevant for the existence of equilibria with enforcement provided that enough agents are present and one is ranked above all others. These details are instead key to the existence of other highly noncooperative equilibria that obtain in certain cases.

Keywords: Jungle; Power Structures; Enforcement; Rule of Law. (search for similar items in EconPapers)
JEL-codes: C79 D00 D01 D31 K19 K40 K49 (search for similar items in EconPapers)
Date: 2024-03-23
New Economics Papers: this item is included in nep-evo, nep-gth, nep-law and nep-mic
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https://www.csef.it/WP/wp711.pdf (application/pdf)

Related works:
Working Paper: The emergence of enforcement (2024)
Working Paper: The Emergence of Enforcement (2023)
Working Paper: The Emergence of Enforcement (2022)
Working Paper: The Emergence of Enforcement (2022)
Working Paper: The Emergence of Enforcement (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:711

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