A model of institutional formation within a rent seeking environment
نویسنده
چکیده
This paper presents a game theoretic model in which some fraction of output is appropriated from entrepreneurs. Entrepreneurs are able to form a league to prevent this appropriation, but this might not be individually rational because of either the free rider problem or coordination failure. The model also shows that poorer countries are less able to form this league and so might not be able to develop institutions establishing property rights. © 2001 Elsevier Science B.V. All rights reserved. JEL classification: O10; H41
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