How Should We Model Property? Thinking with My Critics

Journal of Institutional Economics, 2017, 13(4), 815-27

22 Pages Posted: 31 May 2017 Last revised: 22 Jul 2018

See all articles by Benito Arruñada

Benito Arruñada

Pompeu Fabra University - Department of Economics and Business; Barcelona GSE

Date Written: May 26, 2017

Abstract

Inspired by comments made by Allen (2017), Lueck (2017), Ménard (2017) and Smith (2017), this response clarifies and deepens the analysis in Arruñada (2017a). Its main argument is that to deal with the complexity of property we must abstract secondary elements, such as the physical dimensions of some types of assets, and focus on the interaction between transactions. This sequential-exchange framework captures the main problem of property in the current environment of impersonal markets. It also provides criteria to compare private and public ordering, as well as to organize public solutions that enable new forms of private ordering. The analysis applies the lessons in Coase (1960) to property by not only comparing realities but also maintaining his separate treatment of the definition of property rights and transaction costs. However, it replaces his contractual, single-exchange, framework for one in which contracts interact, causing exchange externalities.

Keywords: property rights, externalities, enforcement, transaction costs, public ordering, private ordering, impersonal exchange

JEL Classification: D23, K11, K12, G38, H41, O17, P48

Suggested Citation

Arruñada, Benito, How Should We Model Property? Thinking with My Critics (May 26, 2017). Journal of Institutional Economics, 2017, 13(4), 815-27. Available at SSRN: https://ssrn.com/abstract=2975965 or http://dx.doi.org/10.2139/ssrn.2975965

Benito Arruñada (Contact Author)

Pompeu Fabra University - Department of Economics and Business ( email )

Ramon Trias Fargas 25-27
Department of Economics and Business
Barcelona, 08005
Spain
+34 93 542 25 72 (Phone)
+34 93 542 17 46 (Fax)

HOME PAGE: http://www.econ.upf.edu/~arrunada

Barcelona GSE ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

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