Bargaining in the Absence of Property Rights: An Experiment

46 Pages Posted: 10 Dec 2015

See all articles by Oren Bar-Gill

Oren Bar-Gill

Harvard Law School

Christoph Engel

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods; University of Bonn - Faculty of Law & Economics; Erasmus University Rotterdam (EUR), Erasmus School of Law, Rotterdam Institute of Law and Economics, Students; Universität Osnabrück - Faculty of Law

Date Written: December 2015

Abstract

The Coase theorem posits: If [1] property rights are perfect, [2] contracts are enforceable, [3] preferences are common knowledge, and [4] transaction costs are zero, then the initial allocation of property rights only matters for distribution, not for efficiency. In this paper we claim that condition [1] can be dropped and show experimentally that this is also empirically true. This also holds when we frame taking as “stealing”, and when the initial possessor has to work for the good.

Keywords: Coase theorem, absolute vs. relative right, bargaining, efficiency, distribution, fairness

JEL Classification: C91, D01, D02, D03, D47, D61, K11

Suggested Citation

Bar-Gill, Oren and Engel, Christoph, Bargaining in the Absence of Property Rights: An Experiment (December 2015). MPI Collective Goods Preprint, No. 2015/19, Available at SSRN: https://ssrn.com/abstract=2701720 or http://dx.doi.org/10.2139/ssrn.2701720

Oren Bar-Gill

Harvard Law School ( email )

1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States

Christoph Engel (Contact Author)

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany
+049 228 914160 (Phone)
+049 228 9141655 (Fax)

HOME PAGE: http://www.coll.mpg.de/engel.html

University of Bonn - Faculty of Law & Economics

Postfach 2220
D-53012 Bonn
Germany

Erasmus University Rotterdam (EUR), Erasmus School of Law, Rotterdam Institute of Law and Economics, Students ( email )

Burgemeester Oudlaan 50
PO Box 1738
Rotterdam
Netherlands

Universität Osnabrück - Faculty of Law

Osnabruck, D-49069
Germany

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
101
Abstract Views
1,151
rank
286,938
PlumX Metrics