1. Equilibrium in the Jungle

The standard economic approach treats economic activity as voluntary: all involved parties do whatever they do of their own free will. However, life is not just a series of voluntary actions. An agent might use power to seize assets from others or to force others to do things against their will. Economic Theory typically ignores the use of power as a driver of social activity.

This chapter follows Piccione and Rubinstein (2007) which introduces a model of a society referred to as the jungle, in which economic transactions are governed only by coercion. The model consists of a set of agents with exogenous preferences over a set of assets and a power ordering of the agents. Power means that a stronger agent is able to take things away from a weaker agent without the weaker agent's consent.

A jungle equilibrium is a feasible allocation of the assets such that no agent wishes to take assets from an agent (or agents) weaker than himself. We will apply versions of the concept to the housing economy (Shapley and Scarf (1974)) and to the division economy. Throughout, we will deal with standard issues, such as: existence, uniqueness and the fundamental theorems of welfare.