IDEAS home Printed from https://ideas.repec.org/p/icr/wpicer/14-2001.html
   My bibliography  Save this paper

The economic evolution of petroleum property rights in the United States: a test of the Demsetz hypothesis

Author

Listed:
  • Gary Libecap
  • James L. Smith

Abstract

We examine Harold Demsetz’s (1967) prediction that property rights will emerge and be refined once the benefits of doing so exceed the costs. We follow the development of property rights to oil and gas deposits in the United States to test this prediction. The pattern of development has been influenced by technological change, shifts in relative prices, information asymmetries, and political factors. While the pattern follows the broad outlines sketched by Demsetz; details of the bargaining process, the importance of information asymmetries and price volatility, and the key role of politics have resulted in property rights structures that would not have been predicted in a strict neo-classical sense. Our analysis provides insights regarding the structure and scope of voluntary unitization agreements, and appropriate limits on the practice of compulsory unitization by the states.

Suggested Citation

  • Gary Libecap & James L. Smith, 2001. "The economic evolution of petroleum property rights in the United States: a test of the Demsetz hypothesis," ICER Working Papers 14-2001, ICER - International Centre for Economic Research.
  • Handle: RePEc:icr:wpicer:14-2001
    as

    Download full text from publisher

    File URL: http://www.biblioecon.unito.it/biblioservizi/RePEc/icr/wp2001/Libecap14-01.pdf
    Download Restriction: no

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:icr:wpicer:14-2001. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Simone Pellegrino). General contact details of provider: http://edirc.repec.org/data/icerrit.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.