Abstract
This paper investigates the formation of production and trading networks in an economy with general interdependencies and complex property rights. We argue that the right to exclude, a core tenet of property, grants asset owners local monopoly power that is both amplified and constrained by an economy's endogenous production network. Supply multisourcing and a bias toward shorter supply chains emerge in equilibrium. As a methodological contribution, we generalize the top trading cycles algorithm to a production economy. Applications of the framework include the study of vertical integration and government intervention in supply chains.
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