Anarchy, Monopoly, and Predation

Peter T. Leeson ()

Journal of Institutional and Theoretical Economics (JITE), 2007, vol. 163, issue 3, pages 467-482

Abstract: Although institutions rooted in the folk theorem can support self-enforcing exchange in a wide variety of contexts, their potential to create cooperation is not limitless. In particular, the folk theorem may break down when some agents are physically stronger than others. I demonstrate this in the context of Stringham's [2006] vertically integrated proprietary communities. In this system a monopoly proprietor maximizes profits by optimally extorting his tenants in violation of voluntary contracts. The result is a predatory rather than voluntary regime.

JEL-codes: D74 H10 K40 L33 (search for similar items in EconPapers)
Date: 2007
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