Investment under Anarchy

This paper presents an experimental test of a 2-player, one-shot game of conflict in which we vary the strength of property rights and the return on investment. Our results suggest that stronger property rights reduce conflict and increase investment. Contrary to intuition, we find increasing the rate of return has practically no effect on investment and that this failure to stimulate investment is largely due to deficiencies in property right institutions.

Business · Economics · Investment (military) · Political science · Politics · Culture, Economy, and Development Studies · Experimental Behavioral Economics Studies · Land Rights and Reforms · Law

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