Rationing by Racing and the Oklahoma Land Rushes
Originally published in The Journal of Institutional Economics
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.