TY - JOUR
AU1 - Balbuzanov, Ivan
AU2 - Kotowski, Maciej H.
AB - This paper investigates the formation of production and trading networks in economies with general interdependencies and complex property rights. We argue that the right to exclude, a core tenet of property, grants asset owners local monopoly power that is amplified by an economy's endogenous production network. Our analysis generalizes the exclusion core, a cooperative solution concept based on the right to exclude, to markets with production. We identify sufficient (and essentially necessary) conditions for the nonemptiness of the exclusion core. Multisourcing and a bias toward shorter supply chains emerge in exclusion‐core outcomes. As a methodological contribution, we generalize the top trading cycles algorithm to a production economy and we show that it identifies outcomes in an economy's exclusion core.
TI - The property rights theory of production networks
JF - Theoretical Economics
DO - 10.3982/te5413
DA - 2024-11-01
UR - https://www.deepdyve.com/lp/wiley/the-property-rights-theory-of-production-networks-sN0tJqSW7g
SP - 1619
EP - 1658
VL - 19
IS - 4
DP - DeepDyve
ER -