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Historical Property Rights, Sociality, And The Emergence Of Impersonal Exchange In Long-Distance Trade, Vernon Smith, Erik Kimbrough, Bart Wilson
Historical Property Rights, Sociality, And The Emergence Of Impersonal Exchange In Long-Distance Trade, Vernon Smith, Erik Kimbrough, Bart Wilson
Vernon L. Smith
This laboratory experiment explores the extent to which impersonal exchange emerges from personal exchange with opportunities for long-distance trade. We design a three-commodity production and exchange economy in which agents in three geographically separated villages must develop multilateral exchange networks to import a third good only available abroad. For treatments, we induce two distinct institutional histories to investigate how past experience with property rights affect the evolution of specialization and exchange. We find that a history of un-enforced property rights hinders our subjects' ability to develop the requisite personal social arrangements necessary to support specialization and effectively exploit impersonal long-distance …
Exchange And Specializiation As A Discovery Process, Vernon Smith, Sean Crockett, Bart Wilson
Exchange And Specializiation As A Discovery Process, Vernon Smith, Sean Crockett, Bart Wilson
Vernon L. Smith
In this paper we study the performance of an economic environment that can support specialization if the participants implement and develop some system of exchange. We define a closed economy in which the participants must discover the ability to exchange, implement it, and ascertain what they are comparatively advantaged in producing. Many people demonstrate the ability to find comparative advantage, capture gains from trade, and effectively choose production that is consistent with the choices of others. However, many do not become specialists, even though full efficiency can only be achieved if everyone does so. Near-full efficiency does occur bilaterally in …