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The Rhino's Horn: Incomplete Property Rights and the Optimal Value of an Asset


  • Allen, Douglas W


Under certain conditions, it is possible for the costs of enforcing property rights to exceed their benefit for assets with high first-best values. Under these conditions, previously privately held assets may revert to the public domain. This paper analyzes this prospect and considers attempts to lower the gross value of the asset as a possible method of maintaining the private property right. The paper examines several examples including built-in obsolescence and penal colonies to demonstrate the general idea. Copyright 2002 by the University of Chicago.

Suggested Citation

  • Allen, Douglas W, 2002. "The Rhino's Horn: Incomplete Property Rights and the Optimal Value of an Asset," The Journal of Legal Studies, University of Chicago Press, vol. 31(2), pages 339-358, June.
  • Handle: RePEc:ucp:jlstud:v:31:y:2002:i:2:p:s339-58

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    References listed on IDEAS

    1. Joskow, Paul L, 1988. "Asset Specificity and the Structure of Vertical Relationships: Empirical Evidence," Journal of Law, Economics, and Organization, Oxford University Press, vol. 4(1), pages 95-117, Spring.
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    Cited by:

    1. Douglas J. Crookes & James N. Blignaut, 2015. "Debunking the myth that a legal trade will solve the rhino horn crisis: A system dynamics model for market demand," Working Papers 520, Economic Research Southern Africa.
    2. Marco Magnani, 2013. "Why do dictators like white elephants? An application of the all-pay auction," Economics Bulletin, AccessEcon, vol. 33(3), pages 2260-2269.
    3. J. Amegashie, 2011. "Incomplete property rights and overinvestment," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 37(1), pages 81-95, June.
    4. J. Amegashie, 2008. "Incomplete property rights, redistribution, and welfare," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 30(4), pages 685-699, May.
    5. Amegashie, J. Atsu, 2012. "Productive versus destructive efforts in contests," European Journal of Political Economy, Elsevier, vol. 28(4), pages 461-468.
    6. Lee J. Alston & Edwyna Harris & Bernardo Mueller, 2009. "De Facto and De Jure Property Rights: Land Settlement and Land Conflict on the Australian, Brazilian and U.S. Frontiers," NBER Working Papers 15264, National Bureau of Economic Research, Inc.
    7. Amegashie, J.A., 2002. "Incomplete Property Rights and the Optimal Value of an Asset," Working Papers 2002-16, University of Guelph, Department of Economics and Finance.
    8. Bertacchini, Enrico & Grazzini, Jakob & Vallino, Elena, 2013. "Emergence and Evolution of Property Rights: an Agent Based Perspective," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201340, University of Turin.

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