Konrad, Kai A.; Skaperdas, Stergios (2012): The market for protection and the origin of the state. In: Economic Theory, Vol. 50, No. 2: pp. 417-443 |
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Abstract
We examine a stark setting in which security or protection can be provided by self-governing groups or by for-profit entrepreneurs (kings, kleptocrats, or mafia dons). Though selfgovernance is best for the population, it faces problems of long-term viability. Typically, in providing security the equilibrium market structure involves competing lords, a condition that leads to a tragedy of coercion: all the savings from the provision of collective protection are dissipated and welfare can be as low as, or even lower than, in the absence of the state.
Item Type: | Journal article |
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Form of publication: | Postprint |
Keywords: | property rights, anarchy, government |
Faculties: | Economics Economics > Chairs > MPI for Tax Law and Public Finance |
Subjects: | 300 Social sciences > 320 Political science 300 Social sciences > 330 Economics |
URN: | urn:nbn:de:bvb:19-epub-13961-2 |
ISSN: | 0938-2259 |
Language: | English |
ID Code: | 13961 |
Deposited On: | 03. Sep 2012 08:41 |
Last Modified: | 04. Nov 2020 12:54 |
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