Resale Markets and the Assignment of Property Rights
AbstractAn indivisible good is to be consumed by one of several agents. The consumption involves identity-dependent externalities to the non-consumers. Resale markets for such goods are analysed in various institutional settings with complete information, assuming the agents cannot commit to future actions. It is shown that the laissez-faire institution results in final outcomes that are welfare-equivalent irrespective of the initial structure of property rights. The final outcome need not be socially optimal, however. While the independence result is in the spirit of Coase, the inefficiency result shows that the independence and efficiency properties are logically unrelated.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1196.
Date of creation: Jun 1995
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Other versions of this item:
- Jehiel, Philippe & Moldovanu, Benny, 1999. "Resale Markets and the Assignment of Property Rights," Review of Economic Studies, Wiley Blackwell, vol. 66(4), pages 971-91, October.
- Jehiel, Phillipe & Moldovanu, Benny, 1997. "Resale Markets and the Assignment of Property Rights," Sonderforschungsbereich 504 Publications 97-05, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- D62 - Microeconomics - - Welfare Economics - - - Externalities
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