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How should we model property? Thinking with my critics


Inspired by comments made by Allen (2017), Lueck (2017), Ménard (2017) and Smith (2017), this response clarifies and deepens the analysis in Arruñada (2017a). Its main argument is that to deal with the complexity of property we must abstract secondary elements, such as the physical dimensions of some types of assets, and focus on the interaction between transactions. This sequential-exchange framework captures the main problem of property in the current environment of impersonal markets. It also provides criteria to compare private and public ordering, as well as to organize public solutions that enable new forms of private ordering. The analysis applies the lessons in Coase (1960) to property by not only comparing realities but also maintaining his separate definition of property rights and transaction costs. However, it replaces his contractual, single-exchange, framework for one in which contracts interact, causing exchange externalities.

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Thanks to Douglas W. Allen, Mircea Epure, Dean Lueck, Claude Ménard, Nicolás Nogueroles, Cándido Paz-Ares, Henry E. Smith and Giorgio Zanarone for their comments. This work received support from the Spanish Government through grant ECO2014-57131-R.

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This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

D. Allen (2017), ‘Property as sequential exchange: definition and language issues’, Journal of Institutional Economics, published online. DOI: 10.1017/S1744137417000091.

B. Arruñada (1996), ‘The economics of notaries’, European Journal of Law and Economics, 3 (1), 537.

B. Arruñada (2003), ‘Property enforcement as organized consent’, Journal of Law, Economics, and Organization, 19 (2), 401–44.

B. Arruñada (2010b), ‘Institutional support of the firm: a theory of business registries’, Journal of Legal Analysis, 2 (2), 525–76.

B. Arruñada (2011), ‘Mandatory accounting disclosure by small private companies’, European Journal of Law and Economics, 32 (3), 377413.

B. Arruñada (2012), Institutional Foundations of Impersonal Exchange: Theory and Policy of Contractual Registries, Chicago: University of Chicago Press.

B. Arruñada (2016), ‘How Rome enabled impersonal markets’, Explorations in Economic History, 61, 6884.

B. Arruñada and S. Hansen (2015), ‘Organizing public good provision: lessons from managerial accounting’, International Review of Law and Economics, 42, 185–91.

A. Dnes and D. Lueck (2009), ‘Asymmetric information and the law of servitudes governing land’, Journal of Legal Studies, 38 (1), 89120

R. Harris (2000), Industrializing English Law: Entrepreneurship and Business Organization, 1720–1844, Cambridge: Cambridge University Press.

G. D. Libecap and D. Lueck (2011), ‘The demarcation of land and the role of coordinating property institutions’, Journal of Political Economy 119 (3): 426–67.

C. Ménard (2017), ‘What approach to property rights?Journal of Institutional Economics, published online. DOI: 10.1017/S1744137417000145.

T. W. Merrill and H. E. Smith (2000), ‘Optimal standardization in the law of property: the numerus clausus principle’, Yale Law Journal 110 (1), 170.

T. W. Merrill and H. E. Smith (2011), ‘Making Coasean property more Coasean’, Journal of Law and Economics, 54 (4), S77–S104.

E. Ostrom (1990), Governing the Commons: The Evolution of Institutions for Collective Action, Cambridge: Cambridge University Press.

H. Smith (2017) ‘Property as complex interaction’, Journal of Institutional Economics, published online. DOI: 10.1017/S1744137417000157.

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Journal of Institutional Economics
  • ISSN: 1744-1374
  • EISSN: 1744-1382
  • URL: /core/journals/journal-of-institutional-economics
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