A random quote game from Econlib

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It is appropriate to call this a genuine basis for the emergence of property rights. Both parties agree to and accept the assignment, which carries with it the complementary agreement that they will not behave so as to violate the terms. Both parties can, therefore, reduce their private investment in attack and defense; in the limit, the full value of x can be realized without cost. The agreement on rights of the two parties represents a contractual internalization of an externality relationship that existed in the precontract state of nature. Note, however, that the reversion to some sort of "natural distribution" is required in order that potential trading participants can themselves be identified. This may be illustrated by tracing an alternative conjectural history of the emergence of private property among the various Indian tribes of the Labrador peninsula. The increase in the demand for beaver converted what had previously been an abundant resource into one that was scarce. No property rights previously existed, and the new scarcity produced conflict among the separate tribes. As a result of actual or potential intertribal wars, some "natural distribution" emerged that came to be recognized by all tribes. A reassignment of territorial hunting grounds could then have taken place by mutual agreement, with each tribe finding it advantageous because of the allowable reductions in military effort.

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