American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Exchange Efficiency with Weak Ownership Rights
American Economic Journal: Microeconomics
vol. 8,
no. 4, November 2016
(pp. 230–67)
Abstract
We show that efficient exchange obtains independently of the degree to which a legal system protects the rights of owners. We study a number of different legal rules, including property rules (strong protection), liability rules (any party can take the owner's asset but must pay a legally determined compensation), and even rules that protect the owner's interests very weakly (liability rules with a very low compensation level). Efficiency is obtained as long as the degree of protection provided by law and by the bargaining protocol is not "too" inversely correlated with a party's valuation of the asset.Citation
Bar-Gill, Oren, and Nicola Persico. 2016. "Exchange Efficiency with Weak Ownership Rights." American Economic Journal: Microeconomics, 8 (4): 230–67. DOI: 10.1257/mic.20140232Additional Materials
JEL Classification
- D21 Firm Behavior: Theory
- D51 Exchange and Production Economies
- K11 Property Law
- O34 Intellectual Property and Intellectual Capital
- P14 Capitalist Systems: Property Rights
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