Anarchy in the laboratory (and the role of the state)

Abstract A recent literature on the economics of conflict provides conditions under which groups of individuals divide up between “producers” and “predators” – an “anarchic” equilibrium – as well as conditions under which a government agent is empowered to make collective action choices that can completely deter predation. We test these theoretical predictions in a laboratory experiment. In the absence of a government agent, groups of subjects choose actions consistent with the anarchic equilibrium. The introduction of a government agent, charged with maximizing the consumption of producers, enables subjects to achieve nearly perfect coordination on the Pareto superior equilibrium where all individuals choose to be producers.

[1]  Colin Camerer,et al.  Overconfidence and Excess Entry: An Experimental Approach , 1999 .

[2]  Yvonne Durham,et al.  Do the Rich Get Richer and the Poor Poorer? Experimental Tests of a Model of Power , 1998 .

[3]  Ido Erev,et al.  Equilibrium Play in Large Group Market Entry Games , 1998 .

[4]  D. Usher.  The welfare economics of markets, voting, and predation , 1994 .

[5]  N. Foss.  Leadership, Beliefs and Coordination: An Explorative Discussion , 2001 .

[6]  J. Hirshleifer.  Anarchy and its Breakdown , 1995, Journal of Political Economy.

[7]  J. Huyck,et al.  Tacit Coordination Games, Strategic Uncertainty, and Coordination Failure , 1990 .

[8]  Itai Sened,et al.  The Political Institution of Private Property , 1997 .

[9]  Amnon Rapoport,et al.  Individual strategies in a market entry game , 1995 .

[10]  Charles H. Anderton,et al.  An experimental test of a predator–prey model of appropriation , 2001 .

[11]  D. Usher.  Theft as a Paradigm for Departures from Efficiency , 1987 .

[12]  R. Selten,et al.  End behavior in sequences of finite prisoner's dilemma supergames , 1986 .

[13]  Herschel I. Grossman,et al.  Predators, moral decay, and moral revivals , 2000 .

[14]  Charles H. Anderton,et al.  ECONOMIC ACTIVITY IN THE SHADOW OF CONFLICT , 1999 .

[15]  Barry Sopher,et al.  Social Learning and Coordination Conventions in Intergenerational Games: An Experimental Study , 2003, Journal of Political Economy.

[16]  John B. Van Huyck,et al.  Credible assignments in coordination games , 1992 .

[17]  John B. Van Huyck,et al.  Commitment versus Discretion in the Peasant-Dictator Game , 1995 .

[18]  Yves Steiner,et al.  The Dark Side of the Force. , 2004 .

[19]  Herschel I. Grossman,et al.  Swords or Plowshares? A Theory of the Security of Claims to Property , 1995, Journal of Political Economy.

[20]  Herschel I. Grossman.  "Make Us a King": Anarchy, Predation, and the State , 1997 .

[21]  Herschel I. Grossman,et al.  Predation and accumulation , 1995 .

[22]  J. Hirshleifer.  The Dark Side of the Force: Economic Foundations of Conflict Theory , 2001 .

[23]  Jack Hirshleifer,et al.  THE DARK SIDE OF THE FORCE: WESTERN ECONOMIC ASSOCIATION INTERNATIONAL 1993 PRESIDENTIAL ADDRESS , 1994 .

[24]  S. Skaperdas.  Cooperation, Conflict, and Power in the Absence of Property Rights , 1991 .