Allocation Of Property Rights Research Articles

Entrepreneurial governance and the nature of the entrepreneurial firm

Everyone uses—but no one defines—the term “entrepreneurial firm.” Nobel laureate Oliver Williamson described the entrepreneurial firm as “a special challenge” to the theory of the firm. Organization scholars struggle with the “evergreen problem” of whether “entrepreneurial organizations are distinct from established organizations.” Building on a rarely used distinction in early transaction cost economics between “capitalist,” “entrepreneurial,” and “collective” enterprises, an entrepreneurial governance mode is here dimensionalized and distinguished from other modes of governing an enterprise. The critical dimension is the allocation of property rights, whereby entrepreneurial governance can be characterized as a hybrid between capital governance and labor governance. This notion is then used to derive the conditions that other relevant legal and organizational traits of the entrepreneurial firm should satisfy to be compatible with this hybrid character. The conclusions indicate three main trails for a new research agenda in a structural view of entrepreneurship: new organizational dimensions and forms; the design of ownership structures; and entrepreneurship and law.

The Problematic Rationality of Private Property Rights

The “private” dimension of social life is problematic, posing conceptual, political, and ecological challenges. Some of these problems arise from the very nature of private property as it is enshrined in social life, which demands special privileges be granted to “private” matters on the grounds that these are private, because the predominant representation of the involved rights is that they reflect claims of the holders, rather than legitimate claims of society as a whole in allocating responsibilities, benefits, and duties. The claim to the rationality of allocations of property rights, this article argues, must be questioned in light of the kind of commonality that is revealed in a striking manner by environmental issues (although it is not restricted to environmental matters). This questioning makes sense in relation to an analysis of social interactions, beyond the problematic opposition between the private sphere and public life.

Assigning Property Rights to Scarce Resources when Individual Wealth Levels are Observable

Abstract In this note, we consider how to allocate property rights to scarce resources when agents have budget constraints. Each individual’s wealth level is often observable to the state, although the individual subjective valuation for the resource is hardly known to the state. Under this situation, we mainly compare the efficiency of allocations under two assignment mechanisms; (i) the random assignment with resale and (ii) priority assignment to the poorest with resale. We show that the latter is more efficient than the former. If the mass of goods to be allocated is large enough, the latter can achieve social optimum.

Property and Moral Responsibilities: Some Reflections on Modern Catholic Social Theory

Professor Eric Claeys’s forthcoming book, Natural Property Rights, offers a deep perspective on property rights principles. However, while the law tends to focus—as I believe it must—on property rights, rights are inextricably intertwined with duties or responsibilities. The natural rights framework for property is, as Claeys says, “good enough for government work.” It reflects a principled way for the government to allocate property rights and use the law to protect them.
 However, it is necessary to look beyond what is desirable for government to protect through law. Other sources propose parameters for reasoned use of property with an emphasis on duties. The Catholic social tradition offers a perspective on the moral duties and responsibilities that accompany property rights. This is not a substitute for natural property rights and their robust legal protection. Rather, it is a way to supplement legally defined rights with a moral perspective stressing the correlative duties and responsibilities that come with those rights. This paper argues that the more focus there is on a rights-based view of property from a legal perspective, the more important it is to look at moral frameworks to promote a healthy and holistic vision of property. Modern Catholic social theory offers just such a framework.

Heterogeneity in the WTA-WTP disparity for irrigation water reliability

This paper assesses the WTP and WTA for improvements and deteriorations, respectively, in irrigation water supply reliability. The assessment relies on a double-sided discrete choice experiment valuation using latent-class modeling accounting for preference and scale heterogeneity. This valuation approach is empirically implemented using a case study of a Spanish irrigated district significantly impacted by climate change. The results obtained show individual-specific preference heterogeneity in the WTA-WTP disparity, primarily driven by the different impacts of water reliability on farmers' utility (changes in business revenues and costs, uncertainty in business performance, and farm income effects) and interindividual differences in loss aversion (different degrees of endowment effect). Additionally, the significant scale heterogeneity and ordering effects found suggest that it may be advisable to use modeling approaches that account for them. Several policy-relevant implications can be drawn, including the non-neutrality of the initial allocation of property rights, repercussions on the cost-benefit of climate change adaptation measures, and the need to account for irrigators’ preference heterogeneity in order to design successful market-based instruments.

The Western crescent rises — a verticality dimension in Louisiana’s mixed legal space

The legal literature discussing mixed jurisdictions has mainly focused on horizontal law mixtures, especially those involving the Civil Law and the Common Law. Harnessing the legal questions raised by land loss in Louisiana’s landscape of waterbodies as a case study, this Article illustrates how American federal law, whether constitutional, statutory or judge-made, has interacted with the allocation of property rights under Louisiana state law. Among the various stakeholders, the legal implications of erosion and subsidence play out in two relationships: firstly, the relationship between private property owners and the State of Louisiana with regard to lakeshore, banks of rivers, bays and streams, and seashore; and secondly, the relationship between the State of Louisiana and the Federal Government with regard to their rights in the territorial sea. In the first relationship, the equal footing doctrine enunciated by the U. S. Supreme Court declares that, because the original thirteen states in the American Union owned the land under their natural navigable water bodies, subsequent entrants would likewise take ownership of such land. Based on the federal equal footing doctrine, Louisiana state law has enjoyed a margin of maneuver to make its own dispositions for the lakeshore, the bank of a river, bayou or stream, and the seashore. Also, when allocating ownership under state law, Louisiana courts have traditionally looked to the federal admiralty definition of navigability. The federal-state interface dominating the second relationship has come to be known as the “tidelands controversy” over submerged lands, along with the wealth of resources, seaward of the low-water mark on Louisiana’s coast. This led to a dance between the U. S. Supreme Court, the U. S. Congress and the State of Louisiana. Although Louisiana ultimately secured jurisdiction up to three nautical miles, its maritime belt still does not match Texas and Florida’s boundaries.

Framing Institutional Choice, 1937–1973: New Institutional Economics and the Neglect of the Commons

ABSTRACT Progressives the world over cherish high hopes in the development of institutions for collective actions. Among these institutions, commons have a long history in western Europe. While a new institutional economics emerged in the 1960s, commons were not taken seriously in postwar economics before the seminal work of Elinor Ostrom in the late 1980s. How can we explain this belated integration of commons in economics? In this paper, we trace some of the origins of the neoclassical comparative institutional analysis. By advocating an institutional comparison in terms of the costs or the value of production under alternative allocations of property rights, Ronald Coase contributed to the narrow theoretical approach taken by new institutional economists. In the late 1960s, neoclassical economists who came to be interested in environmental questions dismissed commons as inefficient solutions to allocation problems. Within this narrow framework, the private enterprise system more often than not was hailed as the best alternative.

THE LANDS WERE NOT EMPTY

THE LANDS WERE NOT EMPTY

Ours, not yours: Property rights, poaching and deterrence in common-pool resources

Governments allocate property rights in different ways to protect common-pool resources (CPR) from over-harvesting, but this can generate conflict between those with access (“insiders”) and those without (“outsiders”). We use a laboratory experiment to determine how mechanisms to allocate property rights influence the decentralized management and defense of a CPR. We first vary whether CPR property rights are earned or randomly assigned. Insiders (subjects holding the property rights) decide how much to harvest from the CPR. Outsiders observe the insiders’ harvest and then choose how much to poach from the CPR. We also vary whether insiders have the ability to deter outsiders with costly punishment after observing poaching. We find that insiders who earned the property right were more likely to defend the CPR and impose significantly more punishment, leading to a significant reduction in extreme poaching. However, lower levels of poaching often went unpunished under both earned and assigned rights. While earned property rights can improve the coordinated deterrence of outsiders, they are insufficient to completely eliminate poaching, and conflict between rights-holders and poachers.

Copyright in AI-generated works: Lessons from recent developments in patent law

By Rita Matulionyte and Jyh-An Lee. In <em>Thaler v The Comptroller-General of Patents, Designs and Trade Marks (DABUS)</em>, Smith J. held that an AI owner can possibly claim patent ownership over an AI-generated invention based on their ownership and control of the AI system. This AI-owner approach reveals a new option to allocate property rights over AI-generated output. While this judgment was primarily about inventorship and ownership of AI-generated invention in patent law, it has important implications for copyright law. After analysing the weaknesses of applying existing judicial approaches to copyright ownership of AI-generated works, this paper examines whether the AI-owner approach is a better option for determining copyright ownership of AI-generated works. The paper argues that while contracts can be used to work around the AI-owner approach in scenarios where users want to commercially exploit the outputs, this approach still provides more certainty and less transaction costs for relevant parties than other approaches proposed so far.

Volatility-reducing biodiversity conservation under strategic interactions

How can decentralized individual decisions inefficiently reduce the ability of biodiversity to mitigate ecological and environmental variability and then its “natural insurance” role? In this article we present a simple theoretical set-up to address this question and to evaluate some policy options.We study a model of strategic competition among farmers for the conversion of a natural forest to agricultural land. Unconverted forest land allows to conserve biodiversity, which contributes to reducing the volatility of agricultural production. Agents' utility is given in terms of a Kreps Porteus stochastic differential utility capable of disentangling risk aversion and aversion to fluctuations.We characterize the land used by each farmer and her welfare at the Nash equilibrium, we evaluate the over-exploitation of the land and the agents' welfare loss compared to the socially optimal solution and we study the drivers of the inefficiencies of the decentralized equilibrium.After characterizing the value of biodiversity in the model, we use it to obtain a decomposition which helps to study the policy implications of the model by identifying in which cases the allocation of property rights is preferable to the introduction of a tax on land conversion. Our results suggest that enforcing property rights is more relevant in case of stagnant economies while taxing land conversion may be more suited for rapidly developing economies.

Allocation of property rights in emerging governance models of agricultural cooperatives in Mato Grosso do Sul: a comparative analysis with traditional cooperatives

Abstract: The discussion about the governance of agricultural cooperatives has emphasized that a better allocation of property rights interferes with the competitiveness of this business model in the increasingly internationalized and deregulated market. This study seeks a greater deepening of the allocation of property rights in agricultural cooperatives in Mato Grosso do Sul/Brazil. The qualitative research was carried out in 4 agricultural cooperatives, two considered an emerging model and two traditional cooperatives. The investigation was conducted through the analysis of minutes of Ordinary General Meetings, statutes, and semi-structured interviews with managers and presidents. It was observed that the agricultural cooperatives, seen as an emerging model, where there is a selection of new members and act in a purchasing pool format, demonstrate an evolution concerning the traditional model by pointing to a greater professionalization of management, evidence of the separation between property and management. Moreover, the emerging model becomes more attractive than the traditional one by efficiently allocating the residual rights (earnings).

Property rights in the Crypto age: NFTs and the auctioning of limited edition artwork

Non-fungible tokens (NFTs) on blockchains have recently emerged as a means of certifying the originality of digital properties, such as artwork. In this paper, we examine limited-edition auctions for the sale of digital artwork using NFTs. We study two types of limited-edition auctions that have been used in practice: the `silent' and `ranked' auctions. We argue that the silent limited-edition auction as currently used in NFT markets is a variant of the well-known discriminatory price auction. We derive the Bayesian Nash equilibrium of this auction, and show that it is revenue equivalent to a VCG auction. Our analysis suggests that bidding behavior in a silent limited-edition auction is more aggressive than a standard discriminatory price auction without editioning; consequently, equilibrium bids are higher in the former. We also study the generalized English auction as an outcome equivalent auction to the ranked limited-edition auction, and show that this does not have a truthful equilibrium. Finally, we examine the uniform-price auction as a potential alternative mechanism for conducting an auction with editioning, and establish the absence of a truthful equilibrium in this instance as well. Our paper represents one of the first attempts to formally model the allocation of property rights using auctions in the digital environment, which is at the forefront of current innovation.

“Buying the Air” – Planning and Land Policy Interventions for Hybrid High-Rises in Frankfurt am Main

Frankfurt am Main is well-known for its financial centre of Europe and recognised as the German city with the highest concentration of high-rise buildings (“skyline”). For several years now, this construction class has also been discovered for hotel, residential and hybrid usages. After the events of 9/11, high-rise construction came to a standstill worldwide. Which domestic and international developer would want to build the highest high-rise as an investment landmark in a city? Instead, smaller residential towers at a height of 60–80 m were preferred by investors. Twenty years later, the completion of an initial 15 hybrid-use high-rise towers in the city of Frankfurt am Main is expected by the year 2023. Other German cities such as Berlin, Hamburg and Dusseldorf are following similar strategies to implement vertical allocations of property rights in towers embedded in selected privately owned (semi-)public spaces. The amenities include arcades, pocket parks, seating areas, landscape terraces, rooftop bars and swimming pools. We will discuss the renaissance of high-rises, which is a market-based and marketing-based approach following the monetary policy of the European Central Bank, wooing investors at a time of unprecedented speed of construction of tall, particularly hybrid, buildings. In the case study of the ‘Four’ inner-city revitalisation project, located on plots formerly known as ‘ the forbidden town’ of Frankfurt as this area was blocked to the public for decades, we will pay particular attention to the planning department’s right to regulate. The findings presented here are the result of scientific project work conducted in 2019–2020. The local government has imposed a 30% mandatory quota for affordable, subsidised housing rents and price reduced condominiums as legally binding requirements for tower constructions to prevent vertical gated communities. Our essay deals with the central areas of real estate development: land and capital investment.

Beyond Primacy: A Stakeholder Theory of Corporate Governance

We develop a stakeholder theory of corporate governance grounded in classical property rights theory, adopting the view that governance should help free individuals maximize their collective economic welfare. Welfare is primarily created through team production and team innovation, and the firm is a legal fiction that enables individuals to govern joint value creation. Once a firm is established, however, other transaction problems arise as a result of incomplete contracting, information asymmetry, market power inequality and/or negative externalities. Essentially, corporate governance entails devising coalitional contracts that help stakeholders control their vulnerability to others’ opportunistic behaviors. Our theory lays out how a specific allocation of property rights helps resolve each transaction problem. We extend earlier efforts to build a stakeholder theory of corporate governance by focusing on a more comprehensive set of transaction problems and articulating concrete governance arrangements suitable for different types of firm-stakeholder relationships. Our theory also contributes to the ongoing debate about the corporate governance of public firms. More specifically, applying our theory to public firms yields an allocation of property rights that is incompatible with the notion of giving primacy to shareholders, or any other group of stakeholders.

Spectrum anarchy: why self-governance of the radio spectrum works better than we think

AbstractThe exploitation of radio-electric spectrum bands for wireless transmission purposes has some features of the commons: it is subject to congestion and conflict without rules governing its use. The Coasean approach is to assign private property rights to overcome the tragedy of the spectrum commons. The process of assigning these rights is still centralized, with governments assigning property rights through agencies such as the Federal Communications Commission and National Telecommunications and Information Administration in the USA. We consider the possibility of self-governance of the spectrum. We use insights from the study of common pool resources governance to analyze the emergence of property rights to spectrum in a ‘government-less’ environment in which norms, rules, and enforcement mechanisms are solely the product of the repeated interactions among participants in the network. Our case study considers the spectrum-sharing arrangement in the 1,695–1,710 MHz band. Using agent-based modeling (ABM), we show that self-governance of the spectrum can work and under what conditions it is likely to improve the efficiency of the allocation of property rights.

Taking as giving, appropriation as access: transfers of land development rights and China’s recent experiments

Economic development at both the domestic and global levels is associated with increasing tensions which are inextricably linked to the meaning and allocation of property rights, which has a great impact on appropriation of resources and may lead to different paths of development. ‘Taking’ – the appropriation of private land for public needs – is a typical example that exhibits those tensions, posing a challenge to the conventional conception of property as individualistic and exclusive rights of possession, use and disposition and to the associated neoliberal model of development. Should the individual landowner be left to bear the cost of a regulatory intervention which endures to the wider benefit of the whole community? How can the tensions between private ownership and public regulation be mitigated? If we take the liberal concept of property, then private property seems to be in constant conflict with public interests and wider social concerns. Meanwhile, community, situating between the state and the individuals, and community’s relationship to development rights have not provoked enough discussion. The paper explores the different ways land development rights might be seen both in Western, essentially common law, systems and in China, especially now and in view of two case studies. An empirical example in Wugang, China, reveals the importance of integrating the ‘community lens’ proposed by Roger Cotterrell into studies of the transfer of land development rights. Reading through the community lens, taking could be giving and appropriation could also be access. This approach provides a new perspective to re-evaluate the relationship between legal appropriation and development.

Envy, Jealousy and Insider Trading: The Case of Martha Stewart

Envy, Jealousy and Insider Trading: The Case of Martha Stewart

The Fashion of TV Show Formats

Over the last years, a vibrant global market for TV show formats has developed. New game show, casting, soap, telenovela, documentary and other formats are sold to broadcasting stations in dozens of countries, leading to a worldwide multi-billion dollar industry. As an analysis of U.S. and European intellectual property law demonstrates, TV show formats are difficult to protect by intellectual property law. Standard theory would predict that in the absence of intellectual property protection, the TV show format industry has insufficient incentives to invest in creative innovation. This article presents a novel theory to explain why the TV show format market is thriving despite a low level of format protection. On the supply side of the industry, demand for TV show formats is hard to predict, return on them is highly skewed, and market participants are both developing original formats and imitating others’ formats. On the demand side, TV show formats are experience goods, and TV viewers sometimes prefer familiar products. As a result, the TV show format market is subject to herding effects on both sides of the market. The interaction of supply-side and demand-side herding leads to fashion cycles in TV show formats. The industry uses the limited protection against format imitation, but has adapted to the fashion cycle. This article tells the story of how an industry has developed institutions enabling it to cope with uncertain demand and unpredictable profitability, while benefiting from limited appropriability of innovation and from the fashion cycles which underlie the innovative process. It demonstrates the great diversity and flexibility of appropriation strategies in a world of limited and uncertain allocation of property rights.

Study of the Allocation of Property Rights in Indian Context and Its Implications for the Urban Impoverishment

Study of the Allocation of Property Rights in Indian Context and Its Implications for the Urban Impoverishment