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Full-Text Articles in Law
Imperfect Property Rights, James Bessen
Imperfect Property Rights, James Bessen
Faculty Scholarship
In theory, property rights allow markets to achieve Pareto optimal allocations. But the literature on contracting largely ignores what happens when property rights are imperfectly defined and enforced. Although some models include weak enforcement or poorly defined rights or "anticommons," this paper develops a general model that includes all of these possibilities. I find that combinations matter: Policy prescriptions to remedy individual imperfections are sometimes inappropriate under other conditions. For example, stronger penalties for violating rights can decrease Pareto efficiency, contrary to a common view. Also, collective rights organizations, such as patent pools, sometimes worsen problems of overlapping claims.
Evaluating The Economic Performance Of Property Systems, James Bessen
Evaluating The Economic Performance Of Property Systems, James Bessen
Faculty Scholarship
How should the economic performance of property systems be evaluated? Benefit-cost analysis is widely used to evaluate non-market based regulation when prices are not available. Market prices provide better information for property systems, but market prices are not necessarily socially optimal when property rights are imperfect. This paper discusses two practical approaches to evaluating the performance of property systems, one based on an analysis of institutional performance, the other based on measuring incentives. As an illustration, I show how these approaches might be used to evaluate the US patent system.
Of Patents And Property, Michael J. Meurer, James Bessen
Of Patents And Property, Michael J. Meurer, James Bessen
Faculty Scholarship
Do patents behave substantially like property rights in tangible assets, in that they encourage development and innovation? This article notes that historical evidence, cross-country evidence, economic experiments, and estimates of net benefits all indicate that general property rights institutions have a substantial direct effect on economic growth. Conversely, with a few important exceptions like chemicals and pharmaceuticals, empirical evidence indicates that intellectual property rights have at best only a weak and indirect effect on economic growth. Further, it appears that for public firms in most industries today, patents may actually discourage investment in innovation for fear of winding up on …
Regulatory Takings: A Chronicle Of The Construction Of A Constitutional Concept, Garrett Power
Regulatory Takings: A Chronicle Of The Construction Of A Constitutional Concept, Garrett Power
Faculty Scholarship
In the American constitutional system the sovereign has the power to enact “regulations which are necessary to the common good and general welfare.” But the Fifth Amendment to the United States Constitution proscribes that : “No person shall be . . . deprived of . . . property, without due process of law; nor shall private property be taken for public use, without just compensation.” And the question of whether a sovereign regulation has “taken” private property without just compensation has puzzled the United States Supreme Court for over two hundred years in over four hundred cases. This paper chronicles …
Accession And Original Ownership, Thomas W. Merrill
Accession And Original Ownership, Thomas W. Merrill
Faculty Scholarship
Although first possession is generally assumed to be the dominant means of establishing original ownership of property, there is a second but less studied principle for initiating ownership, called accession, which awards new resources to the owner of existing property most prominently connected to the new resource. Accession applies across a wide variety of areas, from determining rights to baby animals and growing crops to determining ownership of derivative rights under intellectual property laws. Accession shares common features with first possession, in that both principles assign ownership uniquely in a way that imposes minimal information cost burdens on society. But …