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Property as complex interaction

Published online by Cambridge University Press:  11 April 2017

HENRY E. SMITH
HENRY E. SMITH*
Affiliation:
Harvard Law School
*
*Email: hesmith@law.harvard.edu
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Abstract

In his important article, Benito Arruñada draws out the significance of sequential exchange for property rights and traces inadequacies in the economics of property rights to its overly contractual focus, to the exclusion of multiple transactions on the same asset. In this comment, I argue that although Arruñada's problem is a genuine one, it is part of a larger inadequacy in the economic analysis of property rights: property institutions have to manage complexity stemming from many kinds of interactions, making it problematic to focus solely on local interactions. Modular structures in property, including legal ‘things’ themselves, serve to manage this complexity. The larger problem of complexity allows us to set sequential exchange in its proper context.

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Journal of Institutional Economics , Volume 13 , Issue 4 , December 2017 , pp. 809 - 814
Copyright
Copyright © Millennium Economics Ltd 2017 

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