Bargaining in the absence of property rights : an experiment

Oren Bar-Gill; Christoph Engel

The Coase theorem posits: If [1] property rights are perfect, [2] contracts are enforceable, [3] preferences are common knowledge, and [4] transaction costs are zero, then the initial alloca-tion of property rights only matters for distribution, not for efficiency. In this paper we claim that condition [1] can be dropped and show experimentally that this is also empirically true. This also holds when we frame taking as "stealing" and when the initial possessor has to work for the good.

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Year of publication:	2015
Authors:	Bar-Gill, Oren ; Engel, Christoph
Publisher:	Bonn : Max Planck Inst. for Research on Collective Goods
Subject:	coase theorem \| absolute vs. relative right \| bargaining \| efficiency \| distribution \| fairness \| Coase-Theorem \| Coase theorem \| Experiment \| Verhandlungen \| Negotiations \| Verhandlungstheorie \| Bargaining theory \| Sachenrecht \| Law of property \| Gerechtigkeit \| Justice