Delineation of Property Rights of Complements

9 Pages Posted: 14 Oct 2011

See all articles by Edward Chung Yim Yiu

Edward Chung Yim Yiu

University of Auckland Business School

Date Written: October 14, 2011

Abstract

In the development of transaction cost based property right analysis, clear delineation of private exclusive property rights over communal property is believed to be able to restrain rent dissipation, and is therefore conducive to market transactions and the enhancement of efficiency. However, the interdependence of the rights among complements is seldom investigated. This paper argues that in case of communal complements, the delineation of the property rights of the assets does not necessarily foster the development of market transactions, especially when the supply of one of the rights is likely to be monopolized. The postulation is justified by the multi-ownership and strata-title systems in the management of apartments.

Keywords: transaction cost, property rights, multi-ownership

JEL Classification: D23

Suggested Citation

Yiu, Edward Chung Yim, Delineation of Property Rights of Complements (October 14, 2011). Available at SSRN: https://ssrn.com/abstract=1943929 or http://dx.doi.org/10.2139/ssrn.1943929

Edward Chung Yim Yiu (Contact Author)

University of Auckland Business School ( email )

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