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Expected
income yi
bi
θi
yi
θi
qi
Figure 1: Individual income as a function of individual production
2
Appropriation
Rate F(β)
F (β )
β
1
F(β)
β min β 1e
F(β)
β 2e 1
β max
β min
β
βe
β max
1
β
Relative
advantage
in encroachment
a) No Pareto optimal equilibrium
b) Pareto optimal equilibrium exists
Figure 2: Existence and stability of equilibria
2e
β,
A′
F (β )
A
F (β )
B
C
C′
βmin
βmax
Figure 3: Institutional trap, miracle, and catastrophy
2D
β
θ,
G ( β ,θ )
θ
G ( β ;θ )
θ
θ min
θ max
Figure 4: Local equilibrium with identical comparative advantages
2S
θ