AEA RC T Registr y

The American Economic Association's registry for randomized controlled trials

A key feature of legal systems is to help people to coordinate toward specific behaviors, the so called ``expressive function of the law" (Sunstein, 1996). In this project, we verify whether private property affects coordination in a situation characterized by multiple equilibria. We study a reform of property rights that formalized and registered use rights over land. With the reform, registered land plots can be defended in court against contenders, sold, or used as collateral by land owners. Therefore, the reform introduces a shift from collective and informal land rights to a system akin to private ownership.We test subjects' ability to coordinate using a two-player coordination game characterized by multiple Nash equilibria in pure strategy similar to Jackson and Xing (2014): two asymmetric equilibria characterized by highly inequitable payoffs and one symmetric equilibrium that results in a lower total payoff. We make use of the peculiar implementation of the land rights reform to compare the choices of subjects who experienced land ownership against those who maintained a system of collective and informal land rights.