Property Rights in Sequential Exchange
| Autor: | Giorgio Zanarone, Benito Arruñada, Nuno Garoupa |
|---|---|
| Rok vydání: | 2018 |
| Předmět: |
050502 law
Organizational Behavior and Human Resource Management Economics and Econometrics Property (philosophy) 05 social sciences Perfect information Real estate Conventional wisdom Microeconomics Property rights 0502 economics and business Specialization (functional) Business Asset (economics) 050207 economics Law Barriers to entry 0505 law |
| Zdroj: | The Journal of Law, Economics, and Organization. 35:127-153 |
| ISSN: | 1465-7341 8756-6222 |
| Popis: | We analyze the “sequential exchange” problem in which traders have imperfect information on earlier contracts. We show that under sequential exchange, it is in general not possible to simultaneously implement two key features of markets—specialization between asset ownership and control, and impersonal trade. In particular, we show that in contrast with the conventional wisdom in economics, strong property rights—enforceable against subsequent buyers—may be detrimental to impersonal trade because they expose asset buyers to the risk of collusive relationships between owners and sellers. Finally, we provide conditions under which a mechanism that overcomes the trade-off between specialization and impersonal trade exists. We characterize and discuss such mechanism. Our results provide an efficiency rationale for how property rights are enforced in business, company and real estate transactions, and for the ubiquitousness of “formalization” institutions that the literature has narrowly seen as entry barriers. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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