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Property institutions and the limits of Coase

  • DEAN LUECK (a1)
Abstract
Abstract

Coase's (1960) contractual single-exchange framework is challenged by Arruñada (2017) as a framework that cannot be used to understand the complex nature of property law and related institutions. Arruñada proposes the sequential exchange model as an alternative framework. Differences between the two approaches are considered and some applications in land and natural resources are used to evaluate his critique. These cases support Arruñada's critique of the simple contracting approach to property, showing that for many natural resources private contracting has not been the solution and that a mix of property institutions govern. Contrary to Arruñada, however, I argue that the limits of the single-exchange framework arise not because of sequential exchange, but because assets (parcels of land) are complex and physically connected.

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*Email: lueck@indiana.edu
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Benito Arruñada provided helpful comments.

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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.

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

B. Arruñada (2017) ‘Property as sequential exchange: the forgotten limits of private contract’, Journal of Institutional Economics, published online. DOI: 10.1017/S1744137416000473.

R. H. Coase (1960) ‘The problem of social cost’, Journal of Law and Economics 3 (1):144.

H. S. Gordon (1954) ‘The economic theory of a common property resource: the fishery’, Journal of Political Economy 62 (2):124–42.

H. Hansmann and R. Kraakman (2002) ‘Property, contract, and verification: the numerus clausus problem and the divisibility of rights’, Journal of Legal Studies 31 (2):S373S420.

D. Lueck (1989) ‘The economic nature of wildlife law’, Journal of Legal Studies 18 (2): 291324.

D. Lueck (1995) ‘The rule of first possession and the design of the law’, Journal of Law and Economics 38 (2): 393436.

T. W. Merrill and H. E. Smith (2001) ‘What happened to property in law and economics?’ Yale Law Journal 111 (2):357–98.

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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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