Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2009-11-04
Number: 09-092/1
Author-Name: Harold Houba
Author-Workplace-Name: VU University Amsterdam
Author-Name: Hans-Peter Weikard
Author-Workplace-Name: Wageningen University, and Mansholt Graduate School
Title: Stone Age Equilibrium
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.
Classification-JEL: D0 , D7, P0
Keywords: Power, Exchange Economy, Coercive Trade, Voluntary Trade, Power to Take
File-Url: https://papers.tinbergen.nl/09092.pdf
File-Format: application/pdf
File-Size: 223498 bytes
Handle: RePEc:tin:wpaper:20090092