Property Rights and Investments: An Evolutionary Approach

Luciano Andreozzi

No 822, Department of Economics Working Papers from Department of Economics, University of Trento, Italia

Abstract: When contracts are not enforceable, or property rights are not clearly defined, individuals might lack an incentive to carry out costly investments even when they are socially efficient. Some recent contributions such as Ellingsen and Robles (2002) prove that this problem might be less dramatic than standard economic models would suggest. They propose evolutionary models in which only efficient equilibria can be (stocastically) stable. In this paper we show that these results are not robust with respect to the introduction of individual heterogeneity. When individuals have different cost functions, stochastically stable states are inefficient, even when they induce a positive (suboptimal) level of investment.

Keywords: Specific Investment; Evolution; Fairness; Heterogeneous Agents (search for similar items in EconPapers)
JEL-codes: C78 L14 (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-evo
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.unitn.it/files/22_08_andreozzi.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
Journal Article: Property rights and investments: An evolutionary approach (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:trn:utwpde:0822

Access Statistics for this paper

More papers in Department of Economics Working Papers from Department of Economics, University of Trento, Italia Contact information at EDIRC.
Bibliographic data for series maintained by Luciano Andreozzi ().