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Networks, law, and the paradox of cooperation

Author

Listed:
  • Caplan, Bryan
  • Stringham, Edward
Abstract
There is a tension between libertarians’ optimism about private supply of public goods and skepticism of the viability of voluntary collusion (Cowen 1992, Cowen and Sutter 1999). Playing off this asymmetry, Cowen (1992) advances the novel argument that the “free market in defense services” favored by anarcho-capitalists is a network industry where collusion is especially feasible. The current article dissolves Cowen’s asymmetry, showing that he fails to distinguish between self-enforcing and non-self-enforcing interaction. Case study evidence on network behavior before and after antitrust supports our analysis. Furthermore, libertarians’ joint beliefs on public goods and collusion are, contrary to Cowen and Sutter (1999), theoretically defensible.

Suggested Citation

  • Caplan, Bryan & Stringham, Edward, 2003. "Networks, law, and the paradox of cooperation," MPRA Paper 26086, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:26086
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    Cited by:

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    3. Peter T. Leeson, 2003. "Contracts Without Government," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 18(Spring 20), pages 35-54.
    4. Adam Smith & David Skarbek & Bart Wilson, 2012. "Anarchy, groups, and conflict: an experiment on the emergence of protective associations," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 38(2), pages 325-353, February.
    5. Polterovich, Victor, 2016. "Позитивное Сотрудничество: Факторы И Механизмы Эволюции [Positive Collaboration: Factors and Mechanisms of Evolution]," MPRA Paper 73448, University Library of Munich, Germany.
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    More about this item

    Keywords

    networks; anarcho-Capitalism; collusion;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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