Access the full text.
Sign up today, get DeepDyve free for 14 days.
Loading next page...
/lp/american-economic-association/exchange-efficiency-with-weak-ownership-rights-evPGxWVlUJ
- Publisher
- American Economic Association
- Copyright
- Copyright © 2016 by the American Economic Association
- Subject
- Articles
- ISSN
- 1945-7685
- eISSN
- 1945-7685
- DOI
- 10.1257/mic.20140232
- Publisher site
- See Article on Publisher Site
Abstract
Abstract We show that efficient exchange obtains independently of the degree to which a legal system protects the rights of owners. We study a number of different legal rules, including property rules (strong protection), liability rules (any party can take the owner's asset but must pay a legally determined compensation), and even rules that protect the owner's interests very weakly (liability rules with a very low compensation level). Efficiency is obtained as long as the degree of protection provided by law and by the bargaining protocol is not “too” inversely correlated with a party's valuation of the asset. (JEL D21, D51, K11, 034, P14 )
Journal
American Economic Journal: Microeconomics – American Economic Association
Published: Nov 1, 2016