The Law and Economics of Possession, edited by Yun-chien Chang, Cambridge University Press, 2014, Forthcoming
31 Pages Posted: 24 Apr 2014 Last revised: 20 May 2014
Date Written: April 16, 2014
This Chapter offers a bottom-up account of possession that builds on salience-based accounts of conventions and on the economics of property rights. Possession is a first cut at a legal ontology in an overall modular architecture of property. The legal ontology divides the world up into persons and things, and establishes associations between persons and things. These associations will be in the interest of use, and so possession will usually require stylized duties of abstention on the part of other potential users. Depending on the nature of the group, the resources, and the universe of possible uses, duties of abstention can be implemented though norms of exclusion or governance of particular uses. What counts as a “thing” emerges from a combination of possession and accession, and so these aspects of property form a basic module, which serves as a basic default regime that can be displaced by more refined rules of title and governance. Possessory customs tend to be formalized into law, and yet for reasons of information cost, basic notions of possession retain their importance in many, especially informal, contexts. From the basic modular architecture many of the puzzling features of possession receive an explanation.
Keywords: Property, Possession, Ownership, Salience, Focal Points, custom, Hume, Information cost, default rules, modularity
JEL Classification: K11
Suggested Citation: Suggested Citation
Smith, Henry E., The Elements of Possession (April 16, 2014). The Law and Economics of Possession, edited by Yun-chien Chang, Cambridge University Press, 2014, Forthcoming; Harvard Public Law Working Paper No. 14-16. Available at SSRN: https://ssrn.com/abstract=2428319