This paper develops a theory of endogenous mutual concern. The mutual concern or the morality of economic agents is seen as a means to reduce the inefficiencies of markets in an environment where the enforcement of property rights is castly. We show that rational agents have an incentive to...

In this paper we analyze the optimal interplay between the publie and private enforceement of property rights. In doing so we endogenize the distinction between public and club goods on the one and private and common-pool goods on the other hand. The private enforcement of property rights is...

In this paper we analyze the optimal degree of centralization for the supply of public goods. We identify the reliance on an exclusion mechanism as a central feature of the decentralized provision of public goods. An exclusion mechanism induces a contest between users of the public goods who...