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Fragmentation in Property: Towards a General Model

Journal of Institutional and Theoretical Economics, Vol. 158, No. 4, pp. 594-613, December 2002

George Mason Law & Economics Research Paper No. 02-03

35 Pages Posted: 14 Feb 2002  

Norbert Schulz

University of Wuerzburg - Department of Economics

Francesco Parisi

University of Minnesota - Law School; University of Bologna

Ben Depoorter

University of California Hastings College of Law; Ugent - CASLE; Stanford CIS

Abstract

This paper develops a general model of anticommons fragmentation in property. To this end, we differentiate between different forms of property fragmentation. With the use of several functionally related examples, we consider the equilibria obtained under different scenarios. The various illustrations are later utilized as building blocks for the development of a general model of fragmented property. The model reveals that the private incentives of excluders do not capture the external effects of their individual decisions. Specifically, our model suggests that the results of underutilization of joint property increase monotonically in both (a) the extent of fragmentation; and (b) the foregone synergies and complementarities between the property fragments. Within this context, we explore some of the important implications for the institutional responses to issues of property fragmentation.

JEL Classification: K10, K11, K19, D62, D70

Suggested Citation

Schulz, Norbert and Parisi, Francesco and Depoorter, Ben, Fragmentation in Property: Towards a General Model. Journal of Institutional and Theoretical Economics, Vol. 158, No. 4, pp. 594-613, December 2002; George Mason Law & Economics Research Paper No. 02-03. Available at SSRN: https://ssrn.com/abstract=300681 or http://dx.doi.org/10.2139/ssrn.300681

Norbert Schulz (Contact Author)

University of Wuerzburg - Department of Economics ( email )

Sanderring 2
Lehrstuhl VWL III
D-97070 Wuerzburg
Germany
+49-931/31 29 60 (Phone)
+49-931/31 26 21 (Fax)

Francesco Parisi

University of Minnesota - Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States

University of Bologna ( email )

Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy

Ben Depoorter

University of California Hastings College of Law ( email )

200 McAllister Street
San Francisco, CA 94102
United States

Ugent - CASLE ( email )

Universiteitstraat 4
Belgium

Stanford CIS ( email )

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

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