by Kahneman and Tversky
Prospect theory is a behavioral economic theory that describes
the way people choose between probabilistic alternatives that
involve risk, where the probabilities of outcomes are known.
Law and Economics
What if the property rights are not clearly
No one owns wild fish, the only way to own a
fish is to catch it.
The result is overfishing
TRAGEDY OF THE COMMONS
Thetragedy of the commonsrefers to a
The Nature of the Firm
by Ronald Coase
Ronald Coase received the Nobel Prize in 1991 for his discovery and
clarification of the significance of transaction costs and property
rights for the institutional structure and functioning of the economy.
Applying The Coase Theorem
Sturges v. Bridgeman
For more than 60 years, a confectioner used
two mortars and pestles. A doctor moved next
All was peace and harmony, until the doctor
built a consulting room right against the
Cooke v. Forbes
Property Rights (Legal Meaning)?
From a legal viewpoint, property is a bundle of rights.
When an individual or group purchases a piece of real property, in
addition to the physical property, they receive various rights of