Marco Fabbri (University Pompeu Fabra & Barcelona GSE & Amsterdam Center of Law and Economics)
Physical and virtual event. Proof of CoViD vaccination or recovery required for physical attendance.
Why are impartial institutions such as formalized property rights so important for the emergence of impersonal trade? Previous literature has stressed the role of such institutions in providing third-party enforcement to shield strangers from locals’ opportunism. We document the existence of a second mechanism based on the expressive function of formalized property rights and we study their role in coordinating respect for the property of strangers. Ten years after the randomized introduction of formal property rights across rural Benin, we conducted a taking-dictator-game experiment in which participants can appropriate the endowment of an anonymous stranger from a different village. Even if enforcement institutions are absent and peer effects are silenced by design, participants from villages where the reform was implemented took significantly less than those in control villages. We further give consideration to several possible transmission channels and show that the introduction of formal property institutions may have an “expressive” function, coordinating expectations around non-conflictual outcomes.
Time & Location
Dec 16, 2021 | 06:00 PM