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Comment on (Smith on) Demsetz’s Toward a Theory of Property Rights

Comment on (Smith on) Demsetz’s Toward a Theory of Property Rights . Lee Fennell University of Chicago Law School. The Institutional Gap Demsetz 1967 at 354-55. “If a single person owns land…” “broker” for past and future interests Internalizes many costs and benefits

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Comment on (Smith on) Demsetz’s Toward a Theory of Property Rights

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  1. Comment on (Smith on) Demsetz’sToward a Theory of Property Rights Lee FennellUniversity of Chicago Law School

  2. The Institutional GapDemsetz 1967 at 354-55 • “If a single person owns land…” • “broker” for past and future interests • Internalizes many costs and benefits • Lowers transactions costs for others “Suppose the land is communally owned.” - Pressures toward overhunting = tragedy - Could solve by agreeing to forbear - But negotiating costs are huge! How do we get to property? (See, e.g., Krier 1992, 2009)

  3. Scale Matters (e.g., Ellickson 1993) External governance Internal governance

  4. Things Change Impediments to Adapation Sticky property forms Sticky institutions (Daniels 2007) Sticky scales, a.k.a. the anticommons problem (e.g., Heller 1998) • Value of resources • Tastes, technology, transportation, etc. • Costs of exclusion • Relative costs of internal and external governance

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