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When George Carmack struck gold in the Yukon territory on 17 August 1896, he freely shared the details and started what would eventually be three waves of rushes. This reflected a social norm of the Klondike, namely that any miner who struck gold would share this information. Miners did not behave this way in other nineteenth-century gold rushes. The article's hypothesis is that the extreme mining conditions and local geography of the Yukon led to very secure property rights over mining claims. Therefore, it took only a small incentive payment to induce miners to act in the social interest.
Starting with the California Gold Rush of 1849 a series of gold rushes occurred along the western side of North America as miners searched for the elusive yellow mineral.1 Eventually these efforts culminated in the last, and perhaps greatest, gold rush: the Klondike rush of 1898-1899.2 Located close to the Alaska border, but within the Yukon territory of Canada, the Klondike River is a tributary of the Yukon River. Although called the "Klondike Gold Rush," gold was actually found in the smaller creeks that run into the Klondike and Indian Rivers.3 As Figure 1 shows, the entire area was relatively small, and most of the gold was extracted from a half-dozen creeks-Bonanza, Eldorado, Hunker, and Dominion being the most famous.4 In total about 12 million ounces have been mined from the area since discovery, with around 6 million ounces coming from Eldorado and Bonanza creeks.5
Men had been prospecting in the Yukon river valley since the mid-1870s with enough success to pay for their mining supplies and minimal expenses within their small mining camps. When George Carmack staked his discovery claim on Rabbit (later Bonanza) creek on 17 August 1896, he followed the local custom of telling his fellow miners of the find and started what would eventually be three waves of gold rushes. The first was within a month of the strike when 200 claims were made by local miners in the area. The second rush occurred in the early part of 1897 when about 3,000 people arrived from various parts of Alaska and British Columbia.6 These first two rushes claimed almost the entire paying creeks. Ironically, when the final massive rush of 30,000...