The Property-Contract Balance: Comment
172 Journal of Institutional and Theoretical Economics 70 (2016)
5 Pages Posted: 5 Dec 2015 Last revised: 24 Nov 2016
Date Written: December 2, 2015
Dari-Mattiacci, Guerriero, and Huang (2016) (henceforth DGH), construct a model in which certain goods may be stolen from their owners (O) by intermediaries (or thieves) (I) and be sold to buyers (B). In these and similar circumstances, the law (if the stolen good can be identified) may take the good from the buyer and assign it to its previous owner (henceforth pro-owner rules), or may decide to leave it where it is (henceforth pro-buyer rules). DGH study the implications of their model, and thereby conclude that the normative desirability of pro-buyer versus pro-owner rules hinges primarily on who values the good most.
Below, I provide comments regarding DGH's model and their interpretation of it. While doing so, I make frequent references to the notation and results described in DGH. This makes reading DGH a prerequisite to following my comments.
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