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• W2130893602 abstract "This paper presents a model of Rule of Law in which a continuum of agents plays against the State for the appropriation of the economic assets of a stylised economy. The model shows how each agent can either challenge the State or acquiesce, with the latter having the choice of either protecting property rights or abandoning the economy to anarchy. Players’ payofis are afiected by strategic complementarities, not only between State and agents but also among agents themselves. As a consequence of this, a Coordination Failure is generated. The solution of the game is given by two Pareto-ranked Nash equilibria. Introducing idiosyncratic information and sequential play generates a unique equilibrium, according to the global game approach. On the one hand, this model predicts that high uncertainty and sunk costs in law enforcement have a negative efiect, pushing the economy towards a Pareto-dominated equilibrium. On the other hand, the high value given to the economy’s assets (embedded social norms) has a positive in∞uence, leading to a Pareto-dominant equilibrium." @default.
• W2130893602 created "2016-06-24" @default.
• W2130893602 creator A5014409178 @default.
• W2130893602 date "2006-06-12" @default.
• W2130893602 modified "2023-09-25" @default.
• W2130893602 title "Unique Equilibrium in a Model of Rule of Law" @default.
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• W2130893602 hasPublicationYear "2006" @default.
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