Tenancy in ‘Anticommons’? A Theoretical and Empirical Analysis of Co-Ownership
43 Pages Posted: 9 Jul 2011 Last revised: 24 Jun 2012
Date Written: June 20, 2012
This article argues that a resource held in tenancy in common is likely to be underused and underinvested, and is thus better characterized as an anticommons. Nevertheless, tenancy in common does not necessarily create tragedy, as under most legal regimes each co-tenant has a right to petition for partition at any time, and after partition, new owners are likely to utilize the resource more efficiently.
Using data from Taiwan, this article finds that cooperation among co-tenants does not fail as often as the literature has suggested. In 2005–2010, at least 82.5% of the co-ownership partitions were conducted through voluntary agreements, while only about 7.5% of the partitions were ordered by the court. In addition, using multinomial logistic regression models, this article finds that the court tends to order, and the plaintiffs tend to petition for, partition by sale when partitioning in kind or partial partition would create excessively small plots.
Keywords: tenancy in common, tragedy of the commons, tragedy of the anticommons, partition in kind, partition by sale, partial partition, gridlock, underinvest
JEL Classification: K11
Suggested Citation: Suggested Citation