Fragmentation in Property: Towards a General Model
University of Wuerzburg - Department of Economics
University of Minnesota - Law School; University of Bologna
University of California Hastings College of Law; Ghent University - Center for Advanced Studies in Law & Economics
Journal of Institutional and Theoretical Economics, Vol. 158, No. 4, pp. 594-613, December 2002
George Mason Law & Economics Research Paper No. 02-03
This paper develops a general model of anticommons fragmentation in property. To this end, we differentiate between different forms of property fragmentation. With the use of several functionally related examples, we consider the equilibria obtained under different scenarios. The various illustrations are later utilized as building blocks for the development of a general model of fragmented property. The model reveals that the private incentives of excluders do not capture the external effects of their individual decisions. Specifically, our model suggests that the results of underutilization of joint property increase monotonically in both (a) the extent of fragmentation; and (b) the foregone synergies and complementarities between the property fragments. Within this context, we explore some of the important implications for the institutional responses to issues of property fragmentation.
Number of Pages in PDF File: 35
JEL Classification: K10, K11, K19, D62, D70
Date posted: February 14, 2002
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