Making Coasean Property More Coasean

Authors

Thomas W. Merrill, Columbia Law SchoolFollow
Henry E. Smith

Document Type

Article

Publication Date

2011

DOI

https://doi.org/10.1086/661946

Abstract

In his pioneering work on transaction costs, Ronald Coase presupposed a picture of property as a bundle of government-prescribed use rights. Not only is this picture not essential to Coase’s purpose, but its limitations emerge when we apply Coase’s central insights to analyze the structure of property itself. This leads to the Coase corollary: in a world of zero transaction costs, the nature of property does not matter to allocative efficiency. However, as with the Coase theorem, the real implication is for our world of positive transaction costs: we need to subject the notion of property to a comparative institutional analysis. Because transaction costs are positive, property is initially defined in terms of things, uses are grouped under exclusion rights, and in rem rights are widely employed. A more thoroughly Coasean approach points back to a picture of property more like the traditional one furnished by the law.

Disciplines

Intellectual Property Law | Law | Law and Economics | Property Law and Real Estate

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Comments

© 2011 by The University of Chicago.

Recommended Citation

Thomas W. Merrill & Henry E. Smith, Making Coasean Property More Coasean, 54 J. L. & Econ. S77 (2011).
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/2266