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Bargaining in the Absence of Property Rights: An Experiment

Listed author(s):
  • Oren Bar-Gill
  • Christoph Engel

The Coase theorem posits that if (1) property rights are perfect, (2) contracts are perfectly enforceable, (3) transaction costs are zero, (4) preferences are common knowledge, and (5) parties are rational, then the initial allocation of entitlements matters only for distribution, not for efficiency. We study, in an experimental setting, whether condition 1 is necessary. Our results suggest that property rights have a limited effect on efficiency.

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File URL: http://dx.doi.org/10.1086/687411
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File URL: http://dx.doi.org/10.1086/687411
Download Restriction: Access to the online full text or PDF requires a subscription.

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Article provided by University of Chicago Press in its journal The Journal of Law and Economics.

Volume (Year): 59 (2016)
Issue (Month): 2 ()
Pages: 477-495

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Handle: RePEc:ucp:jlawec:doi:10.1086/687411
Contact details of provider: Web page: http://www.journals.uchicago.edu/JLE/

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