Rationing by racing and the Oklahoma land rushes

Abstract

Yoram Barzel was always aware that competition is ubiquitous and takes many forms, and he was among the first to analyze settings where individuals compete on the basis of time, rather than price. This paper applies his insights to study the Oklahoma land rushes, where thousands of individuals raced to establish property rights to land. A simple modification of Barzel's analysis generates a model of rationing by racing, and we test its predictions using new data on the timing and location of over 73,000 homestead claims within the five distinct land rushes and one lottery. We find that increases in land quality or decreases in the cost of racing generate corresponding increases in the equilibrium speed, implying that potential rents are dissipated by investments in speed. The analysis highlights the lasting significance of Barzel's insights regarding non-price competition.

The chronic uncertainty of American Indian property rights

“…Moreover, privatization is not guaranteed to be better than Indian solutions or even to be the first-best solution to economic development issues in Indian country; the presumption that it is ignores the historical and cultural aspects that can make privatization problematic on reservations (Miller, 2018). We therefore look to recent institutional scholarship that emphasizes the importance of the ongoing process by which property rights are allocated and enforced (Arruñada, 2012), as well as the persistent consequences that can result from variance (Allen and Leonard, 2020) or defects (Alston and Smith, 2020) in this process. According to these perspectives, an individual's economic behavior depends not only on the static form of property rights available to them for economic use, but also the larger political economic context that determines the ongoing stability of that institutional structure.…”

The Art and Science of Economic Explanation: Introduction to the Special Issue in Honor of Yoram Barzel

“…Allen and Leonard (2019) build upon Barzel's theory of the allocation of scarce resources by waiting to develop a model of “rationing by racing.” Barzel's original idea was that resources left in the public domain will generate the effort of individual agents to capture their value. When resources are rationed by waiting, the length of the line will depend on the value of access to the marginal consumer.…”