Eco 11-19 - Economics Notes 11-19-07 1. Property Rights a....

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Economics Notes 11-19-07 1. Property Rights a. Are complete if one is able to make all of the decisions with respect to the good b. Are perfect if, along one dimension of use, there is no infringement on the choice you are making. i. If you have the PR over something you can: 1. Destroy it 2. Sell it 3. Alter it/improve 4. Exclude others from utilizing it 5. Consume it a. (1bi 1-5 are examples on dimensions) ii. In the real world, PR won’t be either perfect or complete. 1. Either The PR is held by someone else a. Or it is too costly to enforce one’s PR c. Public Domain: i. State of the world where there is no Property Rights ii. If there are no Property Rights, 1. Then there’s NO TRADE 2. And there’s no wealth d. If Property rights are perfectly defined and complete: i. The gains from trade are maximized, and wealth is maximized e. All things equal, people prefer “more” PR to less i. People will take measures to obtain PR 1. Theft 2. Privatize a good in the public domain 3. Agree (or cooperate) with others to divide a resource
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Eco 11-19 - Economics Notes 11-19-07 1. Property Rights a....

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