Property vs Commons The benefits of treating something as property A mechanism for moving it to its highest valued use An incentive to maintain property An incentive to make things ·The right incentive The costs of treating something as property You have to monitor use and enforce your rights You have to bear the cost of transacting over it-consider tolls vs free trespass There may be costs to converting unowned resources,such as wilderness land,to property
Property vs Commons • The benefits of treating something as property • A mechanism for moving it to its highest valued use • An incentive to maintain property • An incentive to make things • The right incentive • The costs of treating something as property • You have to monitor use and enforce your rights • You have to bear the cost of transacting over it–consider tolls vs free trespass • There may be costs to converting unowned resources, such as wilderness land, to property
How Important Is Each of These? That depends on the particular thing that might or might not be property Does it have to be produced? Is there a limited supply?Is overuse a problem? How elastic is the supply?Will not getting ownership much reduce it? Are there costs to assigning property rights?Consider land. It also depends on the technologies for enforcing property rights Consider the difference between IP that requires a printing press and that doesn't Technologies for detecting trespassers. 。Burglar alarms. ·D0gS
How Important Is Each of These? • That depends on the particular thing that might or might not be property • Does it have to be produced? • Is there a limited supply? Is overuse a problem? • How elastic is the supply? Will not getting ownership much reduce it? • Are there costs to assigning property rights? Consider land. • It also depends on the technologies for enforcing property rights • Consider the difference between IP that requires a printing press and that doesn’t • Technologies for detecting trespassers. • Burglar alarms. • Dogs
What Belongs in the Bundle? Consider the case of land Which rights belong together Which rights are clearly more valuable to someone else? Which are valuable to two or more people? In which case you might get the initial assignment wrong Which raises the question of how easily can it be fixed? .That gets us back to property vs liability,transaction costs,and all that stuff Or you might find some way of dividing the right to give each person the part he wants You have the right to dig on your property,except that I have the right of lateral support Or of dividing it so that only the part valuable to both must be transacted over Coal rights in Pennsylvania Only the support right need bargainingover
What Belongs in the Bundle? • Consider the case of land • Which rights belong together • Which rights are clearly more valuable to someone else? • Which are valuable to two or more people? • In which case you might get the initial assignment wrong • Which raises the question of how easily can it be fixed? • That gets us back to property vs liability, transaction costs, and all that stuff • Or you might find some way of dividing the right to give each person the part he wants • You have the right to dig on your property, except that • I have the right of lateral support • Or of dividing it so that only the part valuable to both must be transacted over • Coal rights in Pennsylvania • Only the support right need bargaining over
Property Rights for Space Assume we get much better at getting things up cheaply What sort of things ought to be treated as private property? Where are the benefits of property high ·The costs low? 。Volume of space? Physical Bodies such as Asteroids? Orbits?Geosynchronous orbits are already a scarce good Solid Angle on the Sun?
Property Rights for Space • Assume we get much better at getting things up cheaply • What sort of things ought to be treated as private property? • Where are the benefits of property high • The costs low? • Volume of space? • Physical Bodies such as Asteroids? • Orbits? Geosynchronous orbits are already a scarce good • Solid Angle on the Sun?
Global Warming Currently a commons:anyone is free to put CO,in the air. Suppose we believe that is a problem,want to change it.How? Property rights:You can't put CO2 in the air If it affects me by raising global temperature,sea level Unless you have my permission Liability rule:If you do,you pay me damages based on the harm to me Pigouvian tax:Carbon tax ·Regulation What are the problems with each? Property rights solution:Nobody can light a match.Breath out?Life ends. Liability rule:I have to sue you for damages of.000001 cent? Carbon tax:Problem of estimating the externality,monitoring CO2 output. Direct Regulation:Need permission to do almost everything Usual problems of information needed by the regulators Incentives of the regulators-lots of opportunities for corruption of various sorts
Global Warming • Currently a commons: anyone is free to put CO2 in the air. • Suppose we believe that is a problem, want to change it. How? • Property rights: You can’t put CO2 in the air • If it affects me by raising global temperature, sea level • Unless you have my permission • Liability rule: If you do, you pay me damages based on the harm to me • Pigouvian tax: Carbon tax • Regulation • What are the problems with each? • Property rights solution: Nobody can light a match. Breath out? Life ends. • Liability rule: I have to sue you for damages of .000001 cent? • Carbon tax: Problem of estimating the externality, monitoring CO2 output. • Direct Regulation: Need permission to do almost everything • Usual problems of information needed by the regulators • Incentives of the regulators—lots of opportunities for corruption of various sorts